US-based digital bank Chime has reportedly raised $500m in Series E round increasing its valuation to $5.8bn.

According to a CNBC report, the round was led by an existing investor DST Global.

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The digital bank plans to use the proceeds to develop new products and hire new people, sources told the publication.

The company also plans to double its team strength by the end of next year.

Opening a new office at Chicago and acquiring other fintech firms are also under consideration.

The latest fundraising comes more than nine months after Chime secured $200m in Series D financing round, which was also led by DST Global. Following the Series D round, the company valued at $1.5bn.

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According to the publication, the new fundraising is expected to further fuel competition in the digital banking sector. In the US, Chime faces stiff competition from local rivals. The entry of foreign challengers such as Monzo and N26 has further intensified the competition in the market.

Chime primarily targets the consumers unhappy with the conventional banking services. It offers checking and savings accounts services along with a no-fee debit card to the customers.

All the banking services are provided by The Bancorp Bank or Stride Bank, Federal Deposit Insurance (FDIC) member units.

Currently, the bank is said to have around 6.5 million accounts.