19 Neobanks and the Benefits They Provide Advertiser disclosure: We make you our top priority. Every time. We believe everyone should be able to make financial decisions with confidence. While our website doesn’t include every business or financial product in the marketplace We’re pleased that the guidance we offer, the information we provide and the tools we create are objective, independent easy to use and cost-free. So how do we make money? Our partners compensate us. This could influence the types of products we review and write about (and where those products appear on the site) However, it in no way affects our recommendations or advice that are based on hundreds of hours of study. Our partners are not able to be paid to ensure positive review of their services or products. . 19 Neobanks and what they offer Neobanks distinguish themselves by focusing on certain communities, providing advantages and benefits. By Spencer Tierney Senior Writer | Certificates of Deposit, ethical banking, banking deposits Spencer Tierney is a consumer banking writer for NerdWallet. He has covered personal finance since 2013, with a particular focus on certificates of deposit as well as other banking-related issues. He has had his work featured on The Washington Post, USA Today, The Associated Press and the Los Angeles Times, among other publications. He’s based in Berkeley, California. Sep 23, 2021 Edited by Yuliya Goldshteyn, Assistant Assigning Editor Banking Yuliya Goldshteyn is a bank editor at NerdWallet. She was previously editor, writer and research analyst in a variety of industries, ranging from healthcare and market research. She earned a bachelor’s degree in history from the University of California, Berkeley and a master’s degree in sociology from the University of Chicago. She can be reached by email at
. A majority or all of the items featured here come from our partners who pay us. This influences which products we feature as well as the place and way the product appears on the page. But, it doesn’t influence our evaluations. Our opinions are our own. Here is a list of . The investing information provided on this site is for informational purposes only. NerdWallet does not offer advisory or brokerage services or advice or counsel investors to purchase or sell specific securities, stocks or other investment options. Navigate to a specific neobank or category: For high yield savings: For the most extensive range of accounts: For inexpensive overdrafts for credit-building: | | Investor-friendly: Freelancer-friendly: are financial technology — or fintech — companies that usually offer mobile-oriented banking accounts with eye-catching features such as low-cost credit or cash-back rewards. There are some established Neobanks that offer loans, credit cards or investing productsas well. They typically have no branches, and, since the majority of them do not have banking licenses, they partner with banks to provide security from the Federal Deposit Insurance Corp. In addition, they offer. The neobanks listed on this list are insured by FDIC. Saves Cash Management CD Checking Money Market Member FDIC SoFi Savings and Checking APY 3.75 Members of SoFi with direct deposit can earn up to 3.75% annual percentage yield (APY) for savings accounts (including Vaults) and 2.50 percent APY on checking balances. No minimum amount of direct deposit that is required to earn the 3.75% APY for savings and 2.50% APY for checking balances. Members without direct deposit will earn 1.20% APR on all balances in checking and savings (including Vaults). Rates of interest are subject to change and may change at any point. The rates listed are current as of 01/04/2023. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet Min. balance for APY Member $0 FDIC Marcus by Goldman Sachs Online Savings account APR 3.50 percent 3.50% Annual Percentage Yield (annual per cent yield) with a minimum balance of $0 to earn stated APY. Accounts must be in healthy balance to continue to operate. APY current as of 02/07/2023. Min. balance for APY The cash accounts combine services and features similar to checking, savings or investment accounts in one. Cash management accounts are usually offered by non-bank financial institutions. These accounts offer features and services that are similar to savings, checking or investment accounts into one account. The cash management account is usually offered by non-bank financial institutions. on the Wealthfront website. Wealthfront Cash Account APY 4.05% min. Balance of APY $1 on the Betterment website. Betterment Cash Reserve – Paid non-client promotions APY 4.00 percent annually percent rate (variable) is at 02/06/2023. Min. balance for APY $0 CDs (certificates of deposits) are a type of savings account that has fixed rates and terms, and usually have higher rates of interest than standard savings accounts. CDs (certificates of deposit) are a type of savings account that comes with an unchanging rate and term typically, and have higher interest rates than standard savings accounts. CIT Bank CD APY 4.60% 1.5 years Term 1.5 Years Member FDIC Marcus by Goldman Sachs High-Yield CD APY 4.40 percent 4.40% APR (annual percent yield) as of 01/25/2023 . 1 year Checking accounts are used for cash deposits on a regular basis as well as withdrawals. Checking accounts are utilized to deposit cash on a daily basis and for withdrawals. FDIC SoFi Checking and Savings APY 2.50% FDIC SoFi Savings and Checking APY 2.50 percent SoFi members who have direct deposit have the opportunity to earn up to 3.75 per cent per year in annual percentage returns (APY) in savings account balances (including Vaults) and 2.50 percent APY on their checking balances. No minimum direct deposit amount that is required to be eligible for 3.75% APY for savings, or the 2.50% APY for checking balances. Direct deposit members will receive 1.20% APY on all account balances in checking and savings (including vaults). Interest rates are variable and subject to change at any time. These rates are current as of 01/04/2023. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet Monthly fee $0 Upgrade Rewards Checking APY N/A Monthly fee $0 Deposits are FDIC Insured Current Account APY N/A Monthly fee $0 Deposits are FDIC Insured Chime Checking Account APY N/A Monthly fee $0 Member FDIC Axos Bank(r) Rewards Checking APY 1.25% Receive monthly direct deposits totaling $1,500 or more to earn 0.40% APY. Use the Axos Visa(r) Debit Card for a total of 10 transactions each monthly (min three dollars per purchase) or enroll for Account Aggregation/Personal Financial Manager (PFM) in Online Banking to earn 0.30% annual percentage. Maintain an average daily amount of $2,500 in the Axos Managed Portfolios Invest Account for 0.20 percent APR. Maintain an average daily balance of $2,500 in an Axos Self-Directed Trading Investment Account for 0.20 percent APY. Make use of Your Rewards Checking Account for your full month’s Axos consumer loan payment to earn 0.15% APY. Monthly fee of $0. Money market accounts have rates comparable to savings accounts and include certain checking features. Money market accounts have rates that are similar to savings accounts, and come with some checking features. FDIC UFB Best Money Market Member FDIC UFB’s Best Money Market APR 4.21% Min. balance for APY 0 Member FDIC Discover Bank Money Market Account APY 3.20 0.20 % Min. amount for APY $1. Learn more about: The number of fintech companies that could be called neobanks keeps growing. From 2018 to 2020 Neobanks have exploded between 60 and 256 worldwide, according to a report by the business strategy company Exton Consulting. With more players comes more competition, and some once-innovative features are now more popular among neobanks, such as two-day advance access to direct deposits as well as free access to national ATM networks. And some digital wallets, like and , are competing with neobanks by offering some of the same services. Neobanks are looking for ways to differentiate their offerings by appealing to specific people, like freelancers and travellers from abroad, and providing perks you might not find in traditional banks. Here’s an overview of how some current and upcoming neobanks try to make themselves distinct. >> Learn more for high-yield savings Chime was founded in 2013. Chime is one of the largest neobanks that has more than 12 million customers. Partnered with two banks*, it provides checking and savings accounts that are both free of costs for monthly charges, as well as a secured credit card you can use to build credit. Chime’s savings account has an attractive interest rate of 2.00 per cent annual percentage yield** , with no minimum balance, no maximum amount for earning interest, and no monthly costs. (The Chime’s Checking Account must be opened to open a savings bank account; savings Account is optional.) The spending account offers access to more than 60,000 ATMs throughout the nation and, for customers who make direct deposits, there is a no-cost overdraft program covers up to $200. Cash deposits are offered at large retailers ****, a service not all Neobanks offer. The process of signing up can be easier than at traditional banks as there’s no credit check or prior bank records However, Chime is an . Find more details from Chime *Chime states: “Chime is a financial technology firm, not a bank. Banking services provided via The Bancorp Bank, N.A. as well as Stride Bank, N.A. and Stride Bank, N.A. Members of the FDIC.” “**” *The Annual Percentage Yield (“APY”) for the Chime Savings Account is variable and can be changed at any time. The disclosed APY is effective from October 25, 2022. There is no minimum balance requirement. You must be in possession of $0.01 in savings to earn interest. ” ***”Out-of-network ATM withdrawal charges could apply, except for MoneyPass ATMs at 7-Eleven, or any Allpoint and Visa Plus Alliance ATM.” ****”The retailer who accepts your cash is accountable for the transfer of the cash for deposit into Your Chime Account. Account. There may be fees for cash deposits for any retailer other than Walgreens.” Review Chime reviews: To the page Varo Bank Varo Bank offers checking, savings as well as cash advances. Founded in 2015 and originally operating with partnership with banks, the bank became a nationally chartered bank in August 2020, allowing it to provide its own FDIC insurance. As per Varo, it had 6 million customers by the middle of 2022. The checking account is no cost ATM access, as well as no monthly fees, plus benefits like cash back at specific retailers as well as no international transaction fees. The savings account comes with two requirements to earn an interest rate of 5.00 percent APY for the first $5,000 of savings, which includes a $1,000 minimum in monthly direct deposits and keeping an open savings and checking balance at the end of each month. Otherwise it’s 3.00% APR. Read Varo review To the top the largest variety of options SoFi SoFi — abbreviation to mean “Social Finance” was founded as a student loan refinance firm, but it has since obtained the charter of a bank owned by SoFi. SoFi checking and savings is its account that allows money for spending and saving. It has no account fees for overdrafts, ATM usage, or monthly maintenance (subject to changing at any time). Some perks include earning interest, creating subaccounts for savings, and, for customers with qualified direct deposits, free overdraft protection of that can be up to $50. SoFi also offers many types of loans that are active and automated investing, cryptocurrency trading credit cards, as well as retirement accounts. Review SoFi: Back to top For cheap overdraft One owned by Walmart, One’s banking account comes with a low-cost overdraft plan, a custom budgeting and savings choices. It offers customers the ability to divide their cash into pocket-sized accounts, also known as subaccounts. The pockets that are dedicated to saving offer rates of 1percent on up to $5,000 per customer and 1% for up to $25,000 in the case of customers with direct deposit. One provides fee-free overdraft coverage up to $200 for customers with direct deposits of at least $500 per month. That’s cheaper than big banks with overdraft charges that can range from 35 cents per transfer. Read one reviews:Return to top> Learn more about For credit building GO2bank (and GoBank) Green Dot Corporation has offered different banking services since. Beginning with debit cards for prepaid, it expanded into the first online bank in GoBank which was launched in 2013, and its second bank brand, GO2bank, in 2021. The majority of Green Dot deposit accounts are federally insured by Green Dot Bank. Unlike nearly all neobanks, which require online registration for customers, you can get GoBank and GO2bank debit cards at retailers like Walmart and then activate them online using a mobile app. Between the two brands, GO2bank is easily the better alternative, as it has a lower monthly fee and more perks but less than other neobanks like Chime and Varo. GoBank’s monthly fee of $9 is waived by $500 direct deposits, whereas the GO2bank’s fee of $5 per month is waived with direct deposits without a specified minimum. In addition to its bank account, GO2bank provides a secured credit card that can be used to increase credit score and a savings vault that earns 1% APY for up to $5,000. However, GoBank doesn’t offer a credit card and its savings vault doesn’t earn interest. Check out the GoBank review: Learn more about GO2bank: Return to top Sesame Cash The credit company Credit Sesame launched a free digital banking account in March 2020 that is geared towards helping people live pay-to-pay. The account’s features include access to direct-deposited paychecks that can be made up to two days earlier, cash and mobile check deposits as well as a restricted cash-back program for debit cards and free access to a all-encompassing ATM network. With the account, customers have access to Credit Sesame’s free monitoring of credit scores and daily updates to credit scores. Check the Top to Back MoCaFi MoCaFi, or Mobility Capital Finance is black-owned digital platform that was launched in 2016 and offers free checking to serve the majority of communities that are unbanked or underbanked and focuses on closing the wealth gap between racial groups. It provides a bill pay feature that allows users to submit rent payments to the major credit bureaus in order to create credit history. It is a unique perk. MoCaFi cooperates with its third-party partners to offer free cash deposits at various merchants and also free mobile check deposits that allow for quick cash out. Return to top Dave Dave started in 2017 as a company that offered a pay advance and later expanded to provide an entire checking account. By the middle of 2021, it had around 10 million customers. You can receive a small advance on your next salary without any interest or credit check, and customers with at least $1,000 in direct deposits per month can establish credit histories through rent payments. Dave also offers budgeting tools that incorporates upcoming bills as well as the ability to search for side jobs on its mobile application. There aren’t any fees to use overdrafts or ATMs within the nationwide MoneyPass network and no minimum balance requirements. Read the Dave review: Back to top For Cash-back Rewards Current Current, founded in 2015, offers free and premium checking options that include cash back at some merchants, two-day direct deposit, and quick refunds on gas station card holds. These two benefits are only available for premium accounts, which have the cost of $5 per month. Premium accounts that make direct deposits also come with up to $100 of overdrafts protected completely free of charge. Read Current review: Return to top Upgrade The personal loan company Upgrade was founded in 2017 and launched a no-cost checking account in 2021 with cash-back benefits that are greater than Current’s. The primary benefits of Upgrade’s customers with a checking account are cash-back of 2% for everyday purchases, like in the restaurants and pharmacies and the possibility of 20% rate discounts for personal loans. Customers can also view their credit scores free and summaries of their credit history by using Upgrade’s Credit Health service. Refresh Bella Bella’s approach to banking is, in the words of its website, “built on love.” That translates to a checking account rewards program that gives a random amount of cash back, anywhere from 5% to 200 percent, on selected purchases. It was launched in 2020. Bella doesn’t charge monthly ATM, overdraft or other fees. At present, Bella also covers fees for out-of-network ATM operators. Additionally, they offer a fee-free savings account, though it offers low interest rates and an additional “karma account,” which can be used to help pay for the small purchases of other customers or to take advantage of another’s generosity with karma accounts. >> See our list of the Back to top Cheese Started in March 2021, Cheese is able to tailor its digital banking platform to the immigrant as well as Asian American communities by offering up to 10% cash back at 10,000 businesses, including Asian-owned restaurants and businesses. Customer support is available in English as well as Chinese as well as other languages to come. Accounts accrue interest and don’t incur monthly fees or ATM fees in the national MoneyPass ATM network. Learn the details about Back to top Investor-friendly Acorns The microinvesting app Acorns main product is its automated investing for investors who don’t have hands The company expanded its banking offerings in the year 2018 with Acorns Checking. It comes with a debit card and limited rewards program. It is offered in a bundle that includes an investment account that is tax deductible as well as individual retirement accounts, at a cost of $3 per month (or $5 for a family version). Customers can choose to participate in the “round-up” feature in which each purchase is rounded by an amount, and the change is then invested. The rewards program involves receiving an amount or a portion returned from purchases made at more than 300 companies, and that is also invested. Read Acorns review: Back to top Aspiration Aspiration is an online brokerage firm with an account for cash management, known as Spend & Save, that functions as the hybrid savings and checking account. There are two different versions of the account. The basic Spend & Save account has up to 3.00 percent APY on savings, up to 5% cashback and a monthly fee that is optional which customers pay as they think is fair from $0 on up. The more expensive Aspiration Plus plan has an annual cost of just over $72 and up to 10% cash back and up to 5.00 percent annual percentage yield. There are two accounts available as well, which means you can invest in companies with sustainable businesses and social causes. As an official B Corp company, Aspiration is committed to being a socially responsible and environmentally conscious firm and offers customers customized sustainability scores depending on the companies they make their purchases at. Read Aspiration review: Aspiration Spend and Save accounts are cash-management accounts offered by Aspiration Financial, LLC, an authorized broker-dealer, Member of FINRA/SIPC. It is also an affiliate to Aspiration Partners, Inc. (“Aspiration”). Aspiration Financial is not a bank.” Aspiration is not a bank. Aspiration Save Account’s up to 5.00 percent annual percentage yield (“APY”) that can be up to 83x the average national interest rate is subject to change, subject to change, and only accessible to customers who are who are enrolled in Aspiration Plus after the conditions are met. Customers who aren’t enrolled in Aspiration Plus receive 3.00% APY when conditions are satisfied. Then they can go back to the top. Albert Albert started in 2016 as a money management app and later launched a customized banking service named Albert Cash in August 2021. It currently has more than six million customers. Albert Cash is a banking account that earns cash-back and offers the following benefits including cash advances with no interest up to $250 with integrated budgeting and saving tools, and annual savings bonuses up to 0.10%. For access to Albert’s investing features and earn a savings rate up to 0.25 percent, and take advantage of the personalized support for customers which is known as Genius There is the minimum monthly cost of $4. You need to have an account with a bank outside of the United Kingdom for an account at Albert. Return to top Traveler-friendly Revolut In its first year of operation, the United Kingdom-based Revolut offers appealing features to international travelers looking for affordable exchange rates and an account that allows spend in over 150 currencies. Customers can transfer funds abroad to other Revolut users, and withdraw as much as $300 per month at ATMs without fees and earn an interest rate on their savings. All this is included with the account for free. To get more benefits, such as overseas medical insurance, Revolut offers two accounts with monthly fees of $17 and $10. Review Revolut reviews: Return to top Wise Revolut U.K.-based money transfer company Wise which was previously known as TransferWise, created the multicurrency account which was launched across to U.S. customers in 2017. While there’s a $9 initial cost to use the card as a debit, Wise doesn’t charge monthly charges for account usage and can convert currencies at a competitive exchange rate with a small upfront fee. The conversion of a balance of $1000 U.S. dollars to euros, for example, costs about $4.20 which is 0.42 percent less than most institutions’ foreign-transaction costs of 1% to 3%. The account can contain multiple balances, storing up to 54 currencies simultaneously and converting could be as quick as a matter of seconds. Read Wise review: Return to top Freelancer-friendly Oxygen launched in the early part of 2020, Oxygen’s digital banking account will help freelancers as well as self-employed workers control their money flow. Oxygen doesn’t have monthly or ACH or overdraft fees There are however four pricing tiers for the account, which range from free to $200 annually. All levels provide advantages for travel, including the loss of luggage as well as hotel theft protection. higher levels have more perks such as more savings rates, higher cash back and more virtual cards. One unique benefit is the option to use the Oxygen application to incorporate or legally establish a business, and later . Read Oxygen review: Back to the top Lili Launched in 2019, Lili is a free mobile bank account designed specifically with freelancers and independent contractors in mind. With Lili you can organize your expenses by simply swiping left to indicate “life,” or personal or personal expenses, and then right for “work,” or business. Lili offers tools to assist freelancers to save money for taxes, as well as an emergency savings account. Additionally, if you make use of Lili’s account to pay the earnings you earn from online platforms and payment applications You can get the funds for up to 2 days prior. This last feature is common among many neobanks. Read Lili review Return to the top Neobanks to come soon Keep an eye out for these four new neobanks’ launches in the near future: Daylight: Previously known as Be Money, Daylight plans to open a mobile banking account that focuses on the LGBT+ community with features including access to financial coaches and accounts with a person’s chosen name, rather than the legal one. Greenwood: The Black-owned digital banking firm is already home to half-a-million people waiting on its list for savings and spending accounts which are geared towards reinvesting their wealth into Black as well as Latinx communities. (See our complete list of forthcoming and current .) First Boulevard is a Black-owned banking platform is focused on low-cost banking that offers cash back to businesses owned by Blacks, as well as short financial education videos. The goal of the platform is to create generational wealth that is accessible to Black Americans. Purple: Purple plans to offer mobile banking specifically designed specifically for those with disabilities. It will include a checking account and a tax-advantaged savings account called ABLE accounts. These accounts allow people with disabilities save money, without losing any government assistance. There will also be the debit card that will donate part of the profits towards the Special Olympics. Back to top From credit tracking tools to travel benefits modern checking accounts offer more than their predecessors offered. Before getting one, check whether the fintech firm is a bank or a partner with a bank. Also, consider which features best serve your financial life. The author’s bio: Spencer Tierney is an expert in the field of certificates of deposit at NerdWallet. The work of Spencer Tierney has been featured on USA Today and the Los Angeles Times. In a similar vein… Discover a better savings account See NerdWallet’s picks for the best high-yielding savings accounts online. Dive even deeper in Banking Find more money-saving strategies – straight to your inbox. Sign up and we’ll send you Nerdy posts about the money topics that matter most to you and other strategies to get more value from your money.
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