LendingClub Bank review: Checking, high-yield savings, CDs, and more

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When you think of LendingClub, you may think of peer-to-peer lending. But over the last few years, LendingClub has started offering a suite of FDIC-insured banking products.

So, how does this pioneer of peer-to-peer lending fare in the world of traditional banking? Let's look at what LendingClub offers and whether it's worth opening an account with them.

Is LendingClub good?

LendingClub Bank is a good choice for online banking customers who want competitive rates, no monthly fees, and don't need physical branches. It offers high-yield savings, rewards checking, and CD options.

Key features

LendingClub offers several benefits, though one downside is that there are no physical branches. Still, this online bank has:

• Free-free checking account with no minimum balance
• High-yield savings account earning above-average rates
• Certificate of deposit (CD) terms ranging from six months to five years
• Personal loan and auto loan options
• Mobile and online account access
• Customer service via phone or chat
• FDIC insurance

LendingClub bank accounts

LendingClub offers three main banking products: checking, savings, and CDs.

LendingClub High-Yield Savings

LendingClub’s High-Yield Savings account offers competitive interest rates compared to traditional banks. You can earn 5.00% APY on any balance if you meet the minimum initial deposit of $100.

There are no monthly service fees or minimum balance requirements to worry about, and you’ll get access to a free ATM card. Plus, this high-yield savings account comes with FDIC insurance.

LendingClub Bank Rewards Checking

LendingClub offers a free checking account with no monthly fees, minimum balance requirements, or overdraft fees. This makes it attractive for people who want a simple, no-frills checking account.

Unlike other checking accounts, the Rewards Checking account lets you earn unlimited 1% cash back on debit card purchases. You’ll also get reimbursement for out-of-network ATM fees and early direct deposit.

You’ll also earn interest on your checking account funds: 0.10% APY on the balance between $2,500 and $99,999.99. You’ll earn 0.15% on account balances over $100,000.

LendingClub CDs

Much like its high-yield savings account, LendingClub's CDs offer better rates than most traditional banks. CD terms range between six months and five years. Interest rates range from 4%-5%, depending on the term length.

Keep in mind there is a $2,500 minimum deposit to open a CD. This may be prohibitive to some, especially if you’re looking to build a CD ladder by splitting your deposits across multiple CD terms.

Interest compounds monthly with these CDs. Early withdrawal penalties are similar to other banks — between 90 days to 12 months of interest, depending on the term.

Other LendingClub products

While LendingClub now offers bank accounts, they got their start in peer-to-peer lending and still facilitate personal loans today. Borrowers can access loans up to $40,000 that they pay back in monthly installments. LendingClub’s lending products include:

• Personal loans: You may be eligible to borrow between $1,000-$40,000 at a fixed rate for a 3-5-year term. LendingClub’s personal loans do have origination fees, but there are no prepayment fees.
• Auto loan refinancing: Those with existing auto loans may be able to refinance through LendingClub with no origination fees or prepayment penalties. This may reduce your monthly car payment and loan APR but may increase the term length.
• Auto loans: Car buyers can finance a new or used vehicle through LendingClub.

LendingClub Bank fees

The best aspect of LendingClub’s checking and savings is the lack of any monthly fees. Their checking has no monthly fees, overdraft fees, minimum balance fees, or fees for using out-of-network ATMs.

The only potential fees would come from custom debit card orders, returned deposits, outgoing wire transfers, or requesting copies of statements.

Their high-yield savings and CDs also have no monthly fees or minimum balance requirements. So, from a cost perspective, LendingClub offers straightforward free banking for basic needs.

Should you bank with LendingClub?

Overall, LendingClub can be a great choice if you're looking for an online bank with competitive interest rates and various features that traditional banks offer, like ATM access.

If you already do your banking online and want to earn more interest, LendingClub is worth considering. It likely won’t become your single stop for every financial need. But it can complement an existing setup.

Those who prefer visiting physical branches may prefer traditional banks and credit unions.

LendingClub innovatively straddles both worlds of lending and traditional banking. It makes sense for selective needs, not necessarily to do all of your banking in one place. So the decision comes down to which features fit your habits and financial situation the best right now.

Editorial disclaimer: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.