*By Tanaya Macheel* Fintech start-ups like Simple came along to unbundle the services typically offered by banks — checking, savings, lending, wealth management. But as older, traditional banks improve their digital offerings, often emulating the young fintech companies that forced them to be better, those start-ups have been rebundling. Simple, the original "neobank" ー a digital bank that partners with an established bank, which eliminates the requirement for its own banking license ー was acquired by BBVA Compass in 2014 and quietly began offering personal loans up to $40,000 this summer through a partnership with online lending company Prosper. Executive chairman and interim CEO Dickson Chu confirmed the news in an interview with Cheddar Tuesday. Its initial offering was simply a checking account with savings goals. But the move into personal loans is the latest evidence of the war for deposits and the great rebundling of financial services. “We want to help consumers solve and perform the hard jobs that are in front of them,” Chu said. “Occasionally they need to borrow, so we’re partnering with Prosper. We have other things coming that we believe help deliver a great lending product for times when our customers need to borrow.” These days, consumers have so many choices for where to store their money ー from stock-trading platform Robinhood and micro-investing app Acorns, to cryptocurrency wallet Coinbase, even Starbucks' app and Venmo. Deposits aren't just sitting in banking apps like Simple, and many companies feel the pressure of not being able to hold that money, which they often use to fund their own businesses. So many fintechs that initially launched as single-function apps or features find that, in order to stay competitive, they need to offer a fuller suite of financial services to retain consumers’ deposits. For example, BankMobile, the digital bank that first launched to give students checking accounts, has said it plans to introduce various credit products to its customers. Marcus by Goldman Sachs, which began as a provider of personal loans, now offers savings accounts and certificates of deposit as well as budgeting capabilities and plans to eventually introduce credit cards, wealth management, and retirement offerings. To entice people to keep deposits with Simple, the company is offering a 2.02 percent annual percentage yield on money put toward their savings goals, which it began to roll out Tuesday. “We need customers that are engaged,” Chu said. The APY kicks in on savings goals to which customers contribute at least $2,000. “As they put deposits in our system we grow the kind of scale we need to continue offering the services we’re offering.” For start-ups like Simple, high-interest savings accounts are a play for customer acquisition. It’s also good marketing, which is also true for major banking institutions. The company has framed the new rate as an industry “landmark” in annual percentage yields — which it certainly is when compared to the average APY at the top four U.S. banks, which range from 0.01 percent to 0.06 percent. But according to Stephen Greer, an industry analyst at Celent, the returns are still pretty trivial. “There are so many better ways to stash your money than a savings account,” he told Cheddar, like paying off debt or putting it in a CD. Two percent “is treading water against inflation… the difference \[to the consumer\] is going to be negligible.” But Simple is moving on a growing trend in the industry, particularly among young start-ups, to attract customers by promising to put their money to work rather than letting it sit idly in the vault. HSBC raised its APY to 2.01 percent in June. Marcus raised its rate four times in the last five months, most recently to 1.9 percent last week. Beam, a new online bank, said its savings account will pay up to 4 percent APY. Since the BBVA Compass acquisition, Simple has focused on migrating customers accounts and perfecting the user experience of its initial offering: a checking account accessible online and a mobile app with automated goals-based savings and safe-to-spend features as well as category association. Last year it also rolled out a joint account marketed to anyone, not just married couples, whose relationships involve financial transactions, like roommates or parent-child relationships. Somewhere in the midst of the migration, Simple lost some 0.7 percent of its [customers](https://www.americanbanker.com/news/simple-said-to-drop-07-of-its-customers-in-transition-snafu) and laid off 10 percent of its [staff](https://www.americanbanker.com/list/first-wave-of-neobanks-resets-for-new-offensive). Earlier this year, the company's founding CEO stepped down. Now it’s ready to recommit to growth. “\[Customers\] work hard for their money and we want to create an endowment, we want to be able to participate in having them achieve their goals,” Chu said. For full interview [click here](https://cheddar.com/videos/how-simple-is-transforming-fintech).

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