Money at 30: T-Mobile Money Review
More than 18 months ago, I ended up switching my wireless service from AT&T to T-Mobile. In doing so, I was able to save money in a few different ways — but it turns out there was another savings opportunity I had overlooked until recently: T-Mobile Money. While this digital banking account is open to non-T-Mobile customers, those who do have T-Mobile or now Sprint postpaid plans (as opposed to prepaid plans) can also enjoy bonus perks that make the account even more interesting.
So what could a banking option from a telecom really have to brag about? Let’s take a closer look at T-Mobile Money.
What is T-Mobile Money and What Does it Offer?
Signing up for T-Mobile Money
In order to sign-up for a T-Mobile Money account, you’ll first need to create a T-Mobile ID. If you’re a T-Mobile customer, you already have one of these. But, if you’re not, you can easily create one by entering your name and e-mail address as well as choosing a password. After that, you’ll need to provide some additional personal information such as your address and Social Security number in order to get started.
Now is also a good time to mention that T-Mobile Money doesn’t charge monthly fees, overdraft fees, or the like. Perhaps more importantly, funds are deposited with BankMobile (itself a division of Customers Bank) and are FDIC-insured up to $250,000 per depositor.
Checking or savings?
While T-Mobile Money includes some perks typically reserved for savings accounts (namely paying interest), it’s actually a checking account. In that way, it could be considered a hybrid account akin to similarly-named SoFi Money. While this classification shouldn’t make too much of a difference to users, it’s still worth noting.
Connecting an external bank account
Normally, this is the part of the review where I’d mention that the app utilizes Plaid to seamlessly and securely link your accounts. However, that’s actually not the case this time around. Instead, T-Mobile Money relies on an older technology: micro-deposits. After you manually enter the routing and account number for the account you’d like to link, small, temporary deposits will show up in said account a few days later. Then, you can confirm these deposit amounts with T-Mobile Money in order to allow for future transfers.
In my experience, this process took a couple of business days. While this might not be quite as convenient as the Plaid route, the advantage is that my connection has yet to break as it does with some Plaid-connected accounts. Overall, it’s not that big a deal, but could be a bit of a pain if you’re looking to link a new transfer destination/origin on the fly.
Debit card and checks
Once you open your T-Mobile Money account, a free debit card will be mailed to you. This card bears a fairly standard design, complete with the magenta ‘T’ on a black card. Sadly, it also features embossed numbers on the front, which is quickly going out of style. In any case, the card can also be added to digital wallets such as Apple Pay, Google Pay, and Samsung Pay.
After you activate your card, be careful not to simply discard the paper your card came attached to. That’s because, if you look on the back, you’ll notice that this is actually a sheet of three checks you can write using your account. Meanwhile, if you’d like to order additional (and more conventional) paper checks, you can do so with Vistaprint using the link to the T-Mobile Money app. While I have yet to do this personally, it looks as though they have options starting at $4 for a book of 25 checks.
With your T-Mobile Money debit card, you’ll also be able to access cash at more than 55,000 fee-free ATMs that are part of the Allpoint network. As I’ve previously found with other Allpoint-enabled offerings, these machines are fairly plentiful — at least in my area. Meanwhile, if you visit out-of-network or international ATMs, T-Mobile Money won’t charge you a fee but the machine operator might, with T-Mobile not reimbursing any of those fees.
Mobile check deposit
In addition to the ability to transfer money from a linked bank account, you can also deposit checks into your T-Mobile Money account using their mobile app. Like with similar features from other banks and neobanks, you can utilize this option by entering the deposit amount, capturing the front and back of the check using your phone’s camera, and then completing the transaction. Seeing as this is a function missing from some of the other apps I’ve reviewed recently, I’m glad T-Mobile Money thought to include it.
One of the trade-offs with most digital bank accounts is that, since there are no physical branches, there’s no way to deposit cash into your account. That’s why it’s somewhat surprising to say that T-Mobile Money actually does have a cash deposit option. In the app, you can locate nearby locations such as 7-Eleven, CVS, and Walmart stores where you can use your T-Mobile Money debit card to deposit cash into your account. While this may be convenient, the downside is that some merchants may charge a fee for this service — $5 or more in some cases. Therefore, be sure to check the specifics before utilizing this option and perhaps consider alternative routes.
Rounding out the deposit options, you can also arrange to have your paychecks directly deposited into your T-Mobile Money account. In fact, when you do so, you may be able to access your funds up to two days early. However, like with similar offerings from other outlets, this perk is dependent on the way your employer’s payroll works. For more information on setting up direct deposit, I’d recommend checking with your employer’s HR, payroll department, or other resources.
By default, T-Mobile Money pays out a healthy 1% APY on funds. That’s not only high for a checking account but also bests a lot of other options on the market at the moment. Interest accrued is paid to your account on the last day of the month.
As impressive as the 1% APY is on its own, there’s a way to do even better — but we’ll discuss that in the next section.
Benefits for T-Mobile and Sprint Customers
Up to 4% APY
Now we get to the star of the show: T-Mobile Money’s sky-high interest rates. With your account and as a T-Mobile or Sprint post-paid customer, you can earn up to 4% APY on your funds. However, in order to unlock this, you’ll need to deposit at least $200 a month into your account. Additionally, the 4% APY is only good on balances of up to $3,000, with anything above that earning the regular 1% APY. To be clear, this means that the first $3,000 will continue to yield that 4% APY (about $9.82 per month) while funds above that will earn the 1% APY. So, if you have a balance of $5,000, T-Mobile Money estimates that your effective APY would be 2.79%.
With most bank accounts currently offering well below 1% APY, the opportunity to still earn 4% is pretty amazing. Also of note is that, while you will need to deposit at least $200 a month to score that rate, it seems that you can still spend or transfer that money afterward. That said, I haven’t experimented with this too much to see what disqualifies you, but I can say that I was able to transfer back $50 after unlocking the 4% APY for the month.
“Got Your Back” Protection
Most people who’ve had a traditional bank account known the severe pain of overdraft fees. You could dip just a few cents below your balance and be hit up with a fee of $35 of more. Ouch! That’s where the “Got Your Back” protection program comes in.
Available to T-Mobile and Sprint postpaid customers who deposit at least $200 a month in their T-Mobile Money account, this feature allows you to overdraft your checking account by up to $50. You will not incur a fee for this error as long as you bring your account back to positive territory within 30 days of when it went negative. Should you fail to meet this deadline, you’ll lose your Got Your Back privileges permanently.
This feature is actually remarkably similar to one offered by One Finance (although I believe T-Mobile Money did it first). Another difference is that T-Mobile Money gives you a flat 30 days to repay whereas One requires you to bring your account back to positive before the end of the current calendar month. In any case, Got Your Back is the type of perk you hope you don’t have to use but is certainly nice to have.
AutoPay discount (sort of)
When you flip through T-Mobile Money’s stated benefits, you might notice that it mentions an AutoPay discount. While this may be exciting, you may want to temper your expectations. That’s because this offer is only available if you don’t already have AutoPay set up. In other words, it’s merely floating the suggestion that you use your new T-Mobile Money debit card as a means of earning that $5 a month AutoPay discount. For the record, if you don’t already take advantage of that discount, you should — but, if you’ve already done so, you can ignore this “perk.”
Final Thoughts on T-Mobile Money
As a T-Mobile customer, having a T-Mobile Money account makes a lot of sense. Being able to claim a truly impressive 4% APY without needing to arrange direct deposit is a great deal — and, while I likely won’t need it, the Got Your Back protection is an added bonus. However, with a base rate of 1% APY, this is actually not a bad option for non-T-Mobile or Sprint customers as well. In fact, this is one of the very few digital accounts that I’ve reviewed that allows for cash deposits (although fees may be associated with this option), making it a well-rounded choice for those just making the switch to online banking.
Ultimately, while you might not expect a telecom to offer a comprehensive and attractive banking option, that’s exactly what T-Mobile Money does. With that, I think it’s definitely worth taking a look at.
Also published on Medium.