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Personal finance company Credit Karma announced on Tuesday that it will launch a checking account for US members this year, making it the latest fintech to join the crowded digital banking market.

Credit Karma Money Checking will initially only be available to members who have a savings account with Credit Karma, the San Francisco-based company said.

Opening a checking account will have no minimum balance or deposit requirement, he added.

The service will be available more widely in early 2021 with offers added throughout the year.

Karma, Intuit and Assurance

In February, Intuit, maker of TurboTax, QuickBooks and Mint, agreed to acquire Credit Karma for about $7.1 billion in cash and stock. The combination would bring together two technology leaders focused on personal and small business owner financial challenges, including paying taxes, managing debt, maximizing savings, business accounting, accessing better credit cards and loans — and even auto and home insurance recommendation, a Credit Karma marketplace that entered in 2018.

The $7.1 billion deal is currently being reviewed by the Justice Department, according to a ProPublica report. The review focuses on Credit Karma’s free tax preparation offering which competes with Intuit’s popular TurboTax product. ProPublica reported for the first time in February that “antitrust experts viewed the deal as concerning because it could allow a dominant company to eliminate a competitor with an innovative business model.” Intuit already dominates online tax preparation, with a 67% market share last year, according to ProPublica.

Credit Karma, which has 100 million members in the US, Canada and the UK, is best known for giving customers free access to their credit scores and other personal finance tools. It also offers third-party credit cards and loans to customers, tailored to their credit history.

Several fintechs have expanded the types of financial services they offer and gone beyond their initial area of ​​focus. Many are now looking to attract deposits, often through attractive rates or low fees. (In 2018, Credit Karma entered the insurance business.)

Credit Karma hopes its product will stand out from competitors because of how it connects to the company’s other offerings, Kenneth Lin, CEO and founder of Credit Karma, said in an interview.

“The differentiation is going to be the connection to credit and a holistic view of your financial life,” Lin said. “It helps consumers build credit, pay off debt and save for their future.”

Credit Karma will offer its checking account through MVB Bank Inc., a member of Federal Deposit Insurance Corp., a US banking regulator. Lin said the company has no plans to apply for a bank charter.

“We’re not looking to be a bank,” Lin said.

(Reporting by Anna Irrera in London and C Nivedita in Bengaluru; Editing by Maju Samuel)

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