If you have one or more bank accounts at Simple, you may have heard some surprising news: Simple is closing.
After more than a decade in business, Simple recently announced it would be ceasing operations in 2021. All Simple accounts will remain open during a transition period in which those accounts will be transferred to Simple’s parent, BBVA USA.
Simple was one of several fintech companies leading the charge to change the banking landscape. But several behind-the-scenes moves may have prompted the trailblazing service’s closure.
“Simple was acquired by BBVA in 2014 and BBVA USA was acquired by PNC in late 2020,” notes Adam Moelis, co-founder of Yotta Savings. PNC subsequently announced plans to cut costs as part of the acquisition.
Moelis says the decision to close Simple may be motivated by a push at PNC to focus on its core banking platform. By migrating Simple users there, PNC is better positioned to streamline operations and reduce overhead while also having fewer banking platforms to manage and maintain.
Ryan Conway, senior vice president, head of business development and strategic partnerships at Oxygen Banking, says the move is a wake-up call for neobanks that operate online and forgo the traditional branch banking model.
“To survive in our new normal, they will have to focus on solving customer pain points, inclusive of banking services, and taking it even further,” Conway says. “There’s a lot to be done in this area, seeing as how traditional banks have historically ill-performed in this space.”
If you’re a Simple customer, you may be wondering what this all means for your money. And, even if you don’t currently bank with Simple, it’s helpful to know what comes next if and when your bank shuts down unexpectedly.
Simple Accounts Are Moving to BBVA
If you’re a current Simple banking customer, the first thing you may want to know is what will happen to your accounts.
First, it’s important to note that Simple accounts are already housed with BBVA USA, so you may see no immediate impact in the near term. You can still access your Simple account online or through the Simple mobile app as usual. And, if you have a debit card that’s linked to a Simple checking account, it will continue to work, so you don’t have to worry about losing access to your money.
“Simple accounts were held at BBVA, so the accounts will remain with BBVA, soon to be PNC,” Moelis says. “Users will have the option of maintaining their account with BBVA/PNC through a more traditional banking interface.”
In a statement, BBVA USA said that current Simple customers would eventually be migrated to the BBVA USA mobile app. The bank is touting this as a good thing, since Simple customers will have access to a broader range of products and services through the BBVA USA mobile banking app. This includes BBVA Financial Tools.
Simple has not yet announced a firm timeline for when the transition will be completed. In the meantime, you’ll be able to manage your accounts much the same as you did prior to the announcement of Simple’s closing. This includes continuing to have any direct deposit payments, such as paychecks, government benefits or stimulus checks that are scheduled to be sent to your account.
At this time, Simple’s customer support team isn’t able to answer questions about the transition. But you can still reach out to customer service with other questions about your accounts.
Deposits With Simple Are Still Safe
While bank closings are typically rare, one of the biggest questions you may have is whether your money is safe. The short answer, in Simple’s case, is yes.
Deposits with Simple are housed at BBVA USA, which is an FDIC-insured bank. This means that your money is insured up to the standard limits of $250,000 per depositor, per financial institution, for each account ownership category.
If you have multiple accounts at Simple or you have both individual and joint (shared, to use Simple’s language) accounts, it’s important to understand what limits apply to each of them. The FDIC offers an online estimator tool to help you determine how much of your money is covered.
What’s Next for Simple Customers
Technically, there’s nothing Simple customers need to do regarding the transition to BBVA USA. You can continue using your accounts as you have been, while BBVA USA and Simple handle all of the technical details of the changeover.
But you may want to consider whether a move to BBVA USA makes sense for you. Moelis says it’s likely that the transition will see some Simple users move to other digital banks that offer a comparable banking experience.
Online banks have grown in popularity as more people rely on digital tools to manage their money. According to an American Bankers Association survey, 77% of banking customers said technological improvements by banks make it easier to access financial services.
Digital banks have largely been successful because of how they’ve differentiated themselves from brick-and-mortar banks. For example, some of the key features that typically distinguish neobanks from traditional banks include:
- Lower fees
- Higher APYs on interest-bearing deposit accounts
- User-friendly mobile banking apps and budgeting tools
- Convenient mobile banking features, such as mobile check deposit and person-to-person payments
If you’ve enjoyed banking with Simple so far, consider what the pros and cons of sticking with BBVA USA may be. On the pro side, the most significant advantages may be having access to more functions or tools within BBVA’s mobile banking app and visiting a branch if needed. BBVA USA has hundreds of branches across the U.S., which may appeal to you if you need or prefer to do specific banking tasks in person.
On the other hand, you may be more comfortable continuing with the digital banking model. For example, one advantage Simple offered was a substantially more extensive ATM network compared to the one provided by BBVA. If you lean more toward digital banking as your preferred way to manage money, you may want to check out some of Simple’s competitors to see how their products, services and pricing measure up.
How to Handle a Bank Closing
Simple’s decision to close may seem to have come out of left field, but—even if you don’t bank with them—it’s important to understand that things like mergers and economic downturns can affect a bank’s ability to remain open. Mergers and acquisitions are common, so, if your bank closes or is acquired and then rebranded, it’s not a reason to panic.
Moelis offers some tips on what to do next if your bank announces a closure.
“I would identify the most important features that your bank provided you with and identify another digital bank that offers those same core features,” he says. “After that, it’s easy to open an account and transfer funds over.”
When comparing banks, either online or brick-and-mortar, remember to review the fundamentals. For example, it’s important to consider things like:
- Types of accounts offered: checking accounts, savings accounts, money market accounts, certificates of deposit (CDs)
- ATM locations and access
- Branch locations and access, if you’re looking at traditional banks
- Debit card access, if you’re opening an online-only savings or money market account
- Minimum initial deposit requirements
- Minimum balance requirements
- Monthly maintenance fees, if any
- Other banking fees, such as overdraft fees or CD early withdrawal penalties
- Online banking access and tools
- Mobile banking access and tools
- Customer service availability and options
Reading online banking reviews can help you narrow down your list of potential candidates for a new bank. You can also factor a bank’s overall reputation into the mix. For example, online banks are often viewed as being more innovative in their responses to changing customer needs than brick-and-mortar banks.
Remember that so long as you hold your funds with an FDIC-insured bank, they’re safe up to the applicable limits. So you have time to consider which bank you’d like to move to next—if you decide to move your accounts.
Once you settle on a bank, don’t forget to update your account information. For example, you’ll need to update any automatic bill payments to have them come from your new account. You may also need to update direct deposit information and any recurring payments you make for things like streaming services or online subscriptions. Finally, double-check with your old bank that all your accounts are closed and that no new transactions can be allowed through.
Bottom Line
Simple’s closing marks the end of one chapter for its customers, but it also brings a new beginning for those who choose to continue maintaining their accounts with BBVA USA. If you rely on checking accounts, savings accounts and other deposit accounts to manage your money, it’s a reminder to regularly review what your bank has to offer to help ensure it’s still the best fit for your needs.
Whether it’s prompted by a bank closure or something else, switching banks isn’t as difficult as you might think. And, at the end of the day, you may find that the change is a good thing if it allows you to save money on fees or feel more confident about where you keep your money.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
