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Still confused.

Is the account at the partner bank in my name, or that of Simple?

Assumption alert: the account at the partner bank is in your name.

Your money must be in your name for it to get the FDIC's "$250,000 limit per depositor" insurance coverage. Having one big mattress with Simple's name on it would preclude your money being insured. Ergo, the account must be in your name.

Excellent. That's all I needed to know.

I dont' think that's exactly true. There is such a thing as the CDARS program, which allows you to spread your money between accounts at multiple banks. Not sure what the limitations are on that, but I would be weary of assumptions on this.

If the money were not in my name, that would be deal killer.

EDIT: for clarity.

It's per depositor per bank. Not per depositor period. Spreading your money across accounts at a single bank would not get you additional protection. Spreading your money across banks is how you protect more of your money.

I have no affiliation with Simple, but the relationship seems pretty straight forward. "Where" your money is becomes an abstraction. You hold an account with Simple, and are issued a Visa card with which you can access the funds in your account. Everything beyond that is transparent to you.

The accounts would technically be "in your name", since the funds are yours, but you never have to interface with the other bank, so it becomes a question of: do you want to know the technical specifics, or stick to what's pragmatic? Pragmatically, your account would be with Simple. Your money is in an FDIC insured depository bank, so you don't face any additional risk because of the "partner" distribution.

But pragmatically if they switch banks behind the scenes, that would usually require a hard credit pull every time it occurs. This would seem to hurt a person's credit score if that was what actually occurred (that's why the semantics are important).

Maybe the definition of a hard credit pull should be changed? It discourages people from shopping for loans since you often cant get a real interest rate quote until that provider gets your credit rating themselves anyways.

Well...I think FICO scores should be revamped anyways, but if you're shopping for loans, from what I recall, you only get hit once per 30 days (as obviously if you're in the market for a loan, you shouldn't be negatively affected for every vendor you approach).

Banking is an industry that is not nearly as simple as it seems. There is a difference between "you" walking in to a bank wishing to establish an account and a "partner" like Simple seeking to move depository funds between banks.

The bank pulls a credit check on you, the individual, to mitigate risk. A company like Simple would secure a bond or insurance to mitigate this risk for the partner bank, reducing the friction for a business critical action (moving partner banks).

Pragmatically, Simple wouldn't survive very long if every customer were hit with a hard credit pull every time Simple moved their funds. I'm not even sure that would be legal.

Sure. I would assume it would be very similar to the pre-screening credit card companies do (which does not negatively affect a person's credit); however, if you look at the common components of a person's FICO score, a number of factors _could_ be adversely affected depending on how these things are done (closing of revolving accounts, length of credit history, credit searches, etc.). People are asking questions because it's a complex subject...and while people want to believe they won't be adversely affected, that doesn't mean it won't happen. Simply due dilligence I think.

Fine, but if we're being pragmatic, then it's better to stay with BoA because they're the biggest and they're too big to be allowed to fail. Your money is safer with them than anywhere else.

I would be interested in knowing who the partners are so that I can assure myself that they are doing business in a way that differentiates them from the megabanks.

On a side note: I was onboard with the BankSimple idea when I thought they were building a bank, now, I'm not so sure. I think it's a good idea, but not a great idea.

hey al3x. thanks for the explanation. i had a read over the faq and i think it's still not too clear who would have the deposit. am i right in assuming that on opening an account my initial deposit would go to a specific bank partner, and i would be informed of who that partner was in case i ever wanted to approach them directly to access my deposit without your service?

Answering etherealG's question here because I can't reply to him below:

Yes, you'll know what institution your funds are at. When you get your Simple card, it'll say "issued by {Bank Name}" on the back.

Perhaps your FAQ should say that your money will be kept at a specific institution that you will be informed of.

Does that mean that you'll have to issue new cards if you change the bank you work with?

(Also, what bank do you currently work with? What will the first round of cards say?)

I don't understand who I call when a problem arises. Do I call you, the anonymous partner bank, or is it simply impossible to call somebody if I have an issue?

Hi, cofounder of Simple here.

You call us if you have a problem or question. We'll let you know what bank your funds reside at, but you should never need to contact them. We have our own in-house customer relations staff.

Okay, so let's take a real situation that happened to me: an ATM debited my account $600, but only dispensed $300. In that situation, I call you, and what happens from there?

Thank you for taking the time to answer some of our questions on what is surely a busy day.

According to a video on their site they don't add additional fees for out of network ATMs only forward the fee that ATM charges.

Which ATMs charge $300 in fees per transaction?

sector asked about fees, then removed the question from his post with an edit.

NOTE: sector edited his answer to remove an unrelated question on ATM fees which I was attempting to answer.

I would have thought you'd contact the ATM operator first.

Does this mean you only find out where your funds are if you call and ask, or is there some page (probably hidden under an 'advanced options' panel I suppose) showing the underlying accounts and their balances, internal transfer transaction logs, etc?

Can you tell us which banks in particular will be holding the deposits? I ask because I am interested in your product, but I do not want to do business with any bank that repeatedly forecloses on houses for which it holds no mortgage, hires mercenaries to commit the crime of breaking and entering, has a chief underwriter who has testified "Defective mortgages increased during 2007 to over 80 percent of production," or has admitted to over 100,000 instances of perjury. As such I'd like to be certain that you aren't doing business with Bank of America, Wells Fargo, or Citigroup before I open an account.

Love where you're going with this; however, the trust level is just not high enough for me to move my funds from a credit union (becu.org for me) to your partner bank. Now if you could partner with them, or a similar credit union, that would be amazing.

So you're a metabank, and you provide mint like tools for analyzing expenses, paying bills, etc.. Then you provide better customer service or a better experience or something like that?

Do you plan to use customers leverage to get better terms with the actual banks? Like could you move all the accounts to another bank if it paid better interest or something like that? Do you take a cut of the action?