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Walmart and Green Dot Debut GoBank Checking Alternative

[Monday, November 3rd, 2014]

A new option for people who want to avoid bank fees is available from Walmart and Green Dot.

GoBank, billed as a “checking account product,” is not exactly a checking account and not exactly a reloadable prepaid card, though it has similarities to both of those things. GoBank is offered exclusively at Walmart by Green Dot Bank, which is insured by the FDIC. GoBank is rolling out across the country in waves and will be available everywhere in the U.S. by of the end of October.

Features of GoBank include:

  • No overdraft fees
  • No minimum balance fees
  • No monthly fees if customers make qualifying direct deposits
  • No credit check required for approval and account set-up
  • Early paycheck availability if employers notify GoBank of a pending direct deposit.
  • The ability to instantly send money to other GoBank customers using text or email messages
  • A built-in savings account program, called the Money Vault, that let customers put money away for safekeeping
  • Spending advice from the “Fortune Teller,” a feature that gently nudges members if they try to spend more than they can afford. Prompts include, “Remember that time you won the lottery? I don’t either.” GoBank tracks income and expenses and alerts people when they appear to be going outside their expected budget.

Daniel Eckert, senior VP of services at Walmart, said the GoBank product would serve customers who aren’t satisfied with traditional banking products and who may be impacted by high fees, such as overdraft fees. He said GoBank is “affordable, inclusive, and easy-to-use” and gives people increased options for managing their money.

The CEO of Green Dot Corporation, Steve Straight, quoted a study by Bretton Woods that estimated that “consumers pay approximately $218 – $314 per year for a basic checking account.” Straight touted GoBank’s simple fee structure, the ability of members to avoid fees with qualifying deposits, and FDIC backing as features that make the product attractive to Walmart customers.

GoBank does charge a monthly fee of $8.95, considerably higher than some reloadable prepaid cards, which are also a popular alternative to traditional checking accounts. However, if accountholders deposit a total of at least $500 to the card each month, using direct deposit, the fee will be waived. There is no minimum balance required.

The start-up kit costs $2.95 and includes a starter debit MasterCard that customers can use to make purchases until their permanent card comes in the mail.

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