19 Neobanks and the Benefits They Provide Advertiser disclosure You’re our first priority. Each day. We believe that everyone should be able to make financial decisions with confidence. Although our site doesn’t include every business or financial product available on the market, we’re proud that the guidance we offer and the information we offer as well as the tools we design are objective, independent, straightforward — and free. How do we earn money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on our website), but it doesn’t affect our recommendations or advice that are based on thousands of hours of study. Our partners cannot promise us favorable review of their services or products. . 19 Neobanks and What They Offer Neobanks stand out by focusing on certain communities, offering various advantages and benefits. Written by Spencer Tierney Senior Writer | Certificates of Deposit, ethical banking, banking deposits Spencer Tierney is a consumer banking writer at NerdWallet. He has covered finances for individuals since the year 2013, with a focus on certificate of deposit, as well as other banking topics. His work has been highlighted in The Washington Post, USA Today, The Associated Press and the Los Angeles Times, among others. He is based within Berkeley, California. Sep 23, 2021 Edited by Yuliya Goldshteyn Assistant Assigning Editor — Banking Yuliya Goldshteyn is a bank editor at NerdWallet. She was previously an editor, writer and research analyst in a variety of industries, ranging from health care as well as market research. She graduated with a bachelor’s degree in history at the University of California, Berkeley and a master’s degree in social sciences from the University of Chicago. You can reach her via
. A majority or all of the products featured here are from our partners, who pay us. This influences which products we write about and the location and manner in which the product appears on the page. But, it doesn’t affect our assessments. Our opinions are entirely our own. Here is a list of . The information about investing on this site is for educational purposes only. NerdWallet does not offer advisory or brokerage services or advice or advise investors to buy or sell particular securities, stocks or other investments. Jump to a specific neobank or category: For high-yield savings: widest range of accounts: For inexpensive overdrafts for • | | Investor-friendly: Freelancer-friendly: are financial technology — also known as fintech businesses that typically offer mobile-focused accounts that are brimming with attractive 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 operate without branches and, as a majority of neobanks don’t have banking licenses, they collaborate with banks in order to secure protection against The Federal Deposit Insurance Corp. In addition, they offer. The majority of the neobanks in this list have FDIC-insured accounts. Saves Cash Management CD-checking Money Market member FDIC SoFi Checking and Savings APY 3.75% SoFi members with direct deposit are eligible to receive up 3.75% annual percentage yield (APY) for savings accounts (including Vaults) and 2.50% APY on checking balances. No minimum amount of direct deposit required to qualify for the 3.75 percent APY on savings and 2.50 percent APY on checking balances. Customers who do not deposit direct deposits will receive 1.20% APY on all account balances in checking and savings (including vaults). Interest rates are variable and may change at any time. 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 $0 Member FDIC Marcus by Goldman Sachs Online Savings Bank with APY 3.50% 3.50% APY (annual per cent yield) with $0 minimum balance to earn the stated APY. Accounts must have a positive balance to remain open. APY current as of 02/07/2023. Min. balance for APY The cash accounts combine services and features similar to savings, checking and investment accounts in one. The cash management account is usually offered by non-bank financial establishments. These accounts offer features and services that are that are similar to savings, checking and/or investment accounts in one package. Cash management accounts are generally provided by non-bank financial institutions. On the website of Wealthfront, you can find Wealthfront Cash Account APY 4.05% Min. amount of APY $1 on the Betterment website. Betterment Cash Reserve – Paid Non-Client Promotion APY 4.00 Percent Annual percentage rate (variable) is at 02/06/2023. Min. balance for APY $0 CDs (certificates of deposits) are a kind of savings account that comes with fixed rates and terms typically, they have higher rates of interest than standard savings accounts. CDs (certificates of deposit) are a form of savings account that comes with an unchanging rate and term typically, and have higher interest rates than regular savings accounts. CIT Bank CD APY 4.60% 1.5 years Term 1.5 year Members FDIC Marcus by Goldman Sachs High-Yield CD APY 4.40% 4.40% APY (annual percent yield) as of 01/25/2023 . 1-year Checking account are used to deposit cash on a daily basis and for withdrawals. Checking accounts are utilized to make cash deposits on a regular basis as well as withdrawals. Member FDIC SoFi Checking and Savings APY 2.50% SoFi members with direct deposit are eligible to get up to 3.75 percent per year in annual percentage returns (APY) on savings balances (including vaults) and 2.50 percent APY on their checking balances. There is no minimum amount for direct deposits needed to earn the 3.75% APY for savings and 2.50% APY for checking balances. Customers who do not deposit direct deposits will receive 1.20% interest on balances, including savings and checking (including vaults). Interest rates are variable and can change at any time. These rates are current at the time 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. Make use of your Axos Visa(r) Credit Card for a total of 10 transactions per calendar month (min 3 cents per transaction) or join Account Aggregation/Personal Financial Manager (PFM) in Online Banking to earn 0.30% APY. Maintain an average daily balance of $2,500 per month on An Axos Managed Portfolios Invest Account to earn 0.20 percent APR. Maintain an average daily amount of $2,500 within the Axos Self-Directed Trading Investment Account for 0.20 percent APY. Use the Rewards checking account to pay your entire month’s Axos Consumer loan payment to earn 0.15 percent APY. Monthly fee: $0. Market accounts earn rates that are similar to savings accounts and have certain checking features. Market accounts earn rates that are similar to savings accounts and include certain features for checking. Members FDIC UFB Best Money Market APY 4.21 Percentage Min. balance for APY 0 Member FDIC Discover Bank Money Market Account APY 3.20% Min. balance for APY $1. Learn more about: The number of fintech firms that can be termed neobanks continues to grow. From 2018 to 2020 neobanks skyrocketed between 60 and 256 around the world according to a study by the business strategy company Exton Consulting. With the rise of more players comes more competition. Some once-innovative services are now becoming common for neobanks. These include two-day early access to direct deposits and access to free nationwide ATM networks. And some digital wallets, like and are competing with neobanks by offering some of these features. Neobanks are looking for ways to distinguish themselves by appealing to particular categories, such as freelancers or international travelers, or by offering perks you might not find in traditional banks. Here’s an overview of how some new and emerging Neobanks are trying to distinguish themselves. >> Learn more for high-yield savings Chime was founded in 2013. Chime is among the largest neobanks that has more than 12 million customers. With two banks*, it provides checking and savings accounts, both without costs for monthly charges, as well as a secured credit card you can use to establish credit. Chime’s savings account offers a competitive interest rate of 2.00 percent annual percentage yield** with no minimum balancerequirement, there is no maximum amount to earn interest and no monthly charges. (The Chime’s Checking Account will be required in order to create a savings account, while the Savings Account is optional.) The spending account offers access to more than 60,000 ATMs*** nationwide, and for customers with direct deposits, a fee-free overdraft program covers up to $200. Cash deposits are offered at major retailers ****, which is a benefit that not all neobanks provide. The process of signing up can be easier than at traditional banks as there’s no check on credit or bank records from the past, but Chime has a . See more information from Chime Chime: “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., Members FDIC.” “**” **”The annual Percentage Yield (“APY”) for the Chime Savings Account is variable and can change at any time. The declared APY will be in effect as of October 25, 2022. No minimum balance is required. You must be in possession of $0.01 saved to get interest. ” ***”Out-of-network ATM withdrawal fees may apply except at MoneyPass ATMs in a 7-Eleven store, or at any Allpoint or Visa Plus Alliance ATM.” ****”The retailer that receives your cash will be accountable for the transfer of the cash to deposit into the Chime checking Account. Cash deposit fees may apply for any retailer other from Walgreens.” Review Chime reviews: Back to top Varo Bank Varo Bank offers checking, savings in addition to cash advances. Established in 2015, and initially working with banking partnerships. It became a nationally chartered bank in August 2020, allowing it to provide its very own FDIC insurance. According to Varo its website, it had 6 million customers at the middle of 2022. The checking account comes with no cost ATM access, as well as no monthly charges, as well as perks such as cash back from certain retailers and no foreign transaction charges. Its savings account has some requirements for earning a top rate of 5.00 percent APY on the first $5,000, which includes an annual minimum of $1,000 direct deposits and keeping a positive savings and checking balance at the close of the month. If not, the rate is 3.00 percent APR. Read Varo review To the top the largest variety of accounts SoFi SoFi — which stands in the sense of “Social Finance” began as a student loan refinance business, but has recently received the charter of a bank owned by SoFi. SoFi Checking and Savings is their account that allows the money to spend and save. 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 who have the right direct deposit, free overdraft protection for up to $50. SoFi also offers a range of loans that are automatic and active investing, cryptocurrency trading credit cards, as well as retirement accounts. to top For cheap overdraft One is owned by Walmart One’s bank account comes with a low-cost overdraft program, custom-designed budgeting and savings choices. Customers can choose to arrange their funds into pockets, which are subaccounts that can be referred to as Pockets. Pockets that are devoted to saving are rated at 1percent on up to $5,000 for every customer, and 1% on up to $25,000 in the case of customers who deposit direct. One provides fee-free overdraft coverage as high as $200 for customers who deposit direct at least $500 monthly. That’s cheaper than big banks charge for overdrafts which range from around $35 per transaction. Read reviews on One:Return to top> Learn more about For Credit Building GO2bank (and GoBank) Green Dot Corporation has been offering alternative banking products since 1999. From prepaid debit cards It expanded to GoBank, its very first bank online GoBank which was launched in 2013, and later its second bank brand, GO2bank, in 2021. Every one of the Green Dot deposit accounts are federally insured by Green Dot Bank. Contrary to many neobanks which require online signup and registration, you can purchase GoBank or GO2bank credit card at stores such as Walmart and then activate them online to use with a mobile app. The two brands are comparable, but GO2bank is easily the better choice, with a lower monthly cost and perks but less than other neobanks such as Chime and Varo. GoBank’s $9 per month fee is waived when you make $500 direct deposits, while the GO2bank’s fee of $5 per month is waived when you deposit direct with no minimum amount. Alongside the bank account, GO2bank offers an unsecured credit card to build credit and has savings vaults that earn an APY of 1% for up to $5,000. In contrast, GoBank doesn’t offer a credit card and its savings vault doesn’t earn interest. Read GoBank review: Read more about GO2bank: Back to the top Sesame Cash The credit firm Credit Sesame launched a free digital banking account in March 2020 that concentrates on helping those who live pay-to-pay. The account’s features include direct-deposited paychecks that can be made up to two days earlier as well as mobile and cash deposits and a limited debit card cash-back program, and free access to a nationwide ATM network. The account’s users have access to Credit Sesame’s free monitoring of credit scores and regular updates to credit scores. >> Compare the Back to top MoCaFi MoCaFi, or Mobility Capital Finance is Black-owned digital platform that was launched in 2016 and offers free checking for largely unbanked and underbanked communities and focuses on closing the gap in wealth between the races. It provides a bill pay feature that lets customers make rent payments available to major credit bureaus to build credit history. As a rare perk, MoCaFi cooperates with its third-party partners to provide free cash deposits at various stores and mobile check deposits that allow for quick release of funds. Then back to the top Dave Dave started in 2017 as a company that offered a pay advance and expanded to offer a full-fledged checking account. By mid-2021, the company had more than 1 million clients. You can get a small cash advance from your next salary without interest or a credit check, and those with at least $1,000 in direct deposits per month are able to build credit history by making rent payments. Dave also provides budgeting that includes upcoming expenses and the capability to look for jobs that are not listed through its mobile app. There aren’t any fees for overdrafts or for using ATMs within the nationwide MoneyPass network, and there aren’t any minimum balance requirements. Review by Dave Return to top Cash-back Rewards Current Current, founded in 2015, provides free and premium checking options with cash back at some merchants, two-day direct deposit, and fast refunds on gas station debit hold on cards. The latter two perks are only available to premium accounts that have a $5 monthly fee. Premium accounts with direct deposits also come with up to $100 in overdrafts covered completely free of charge. Read Current review: Back to top Upgrade The personal loan company Upgrade began operations in the year 2017, launched a free checking account in 2021 that offers cash-back benefits that are greater than Current’s. The primary benefits of Upgrade’s checking customers include the cash back of 2% on everyday purchases such as at drugstores and restaurants as well as the possibility of 20% rate reductions for personal loans. Customers can also see their credit scores for no cost and a summary of their credit history by using Upgrade’s Credit Health service. Review Upgrade’s reviews:Return to top of the page Bella Bella’s approach to banking is, in its words, “built on love.” This translates into a checking account rewards program which offers a variable percent of cash back between 5% and 200 percent, on selected purchases. It was launched in 2020. Bella doesn’t charge monthly, overdraft or ATM fees. Currently, Bella also covers fees for out-of-network ATM operators. Also, there is a free savings account, though it offers low interest rates as well as an alternative “karma account,” that is a savings account to cover the small purchases of other customers or to be a recipient of another’s generosity with karma accounts. >> See this list for the Back to top Cheese Started in March 2021, Cheese is able to tailor its digital banking platform for the immigrant as well as Asian American communities with up to 10% cash back on 10,000 businesses, including Asian-owned restaurants and businesses. Support is provided in English and Chinese, with more languages to come. Accounts earn interest and don’t have monthly charges or ATM fees for the nationwide MoneyPass ATM network. Learn the details about Back to top Investor-friendly Acorns Although the microinvesting application Acorns principal product is automated investing for hands-off investors The company expanded its banking offerings in 2018 with Acorns Checking. The account comes with a debit card and limited rewards program, and is available in a bundle that includes an investment account that is tax deductible as well as an account for retirement that is individual, at a cost of $3 per month (or the equivalent of $5 per month for a family version). Customers are able to opt into an “round-up” feature in which each purchase is rounded by a certain amount and that change is then invested. The rewards program allows customers to receive a small percentage or amount returned from purchases made at more than 300 companies, and that also gets invested. Read Acorns review: Back to the top Aspiration Aspiration can be described as an online broker company that has an account for cash management, called Spend & Save, that functions as a hybrid checking and savings account. There are two versions of the account. The basic Spend & Save account has the possibility of 3.00% interest on savings, and as high as 5% cashback and a monthly charge that can be negotiated that customers pay the amount they think is fair from $0 on up. The more expensive Aspiration Plus plan comes with an almost-$72 annual fee, as high as 10% cash back and up to 5.00% annual percentage yield. Two accounts are available as well, which means you can invest in sustainability and social cause. As an accredited B Corp company, Aspiration is committed to being a socially responsible and environmentally conscious company and provides customers with customized sustainability scores based on which businesses they invest in. Check out the Aspiration review: Aspiration Spend & Save accounts are cash-management accounts that are offered through Aspiration Financial, LLC, a registered broker-dealer, Member of FINRA/SIPC and an affiliate that is part of Aspiration Partners, Inc. (“Aspiration”). Aspiration Financial is not a bank.” Its Aspiration Save Account’s up to 5.00 percent Annual Percentage Yield (“APY”) that can be up to 83x the national interest rate is variable, subject to change, and is only available to customers enrolled in Aspiration Plus once the conditions are satisfied. Customers who aren’t enrolled in Aspiration Plus get 3.00% APY when the conditions are fulfilled. Return to top Albert Albert started in 2016 as a mobile app for managing money 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 includes the following benefits that include no-interest cash advances of up to $250 as well as integrated budgeting and savings tools and annual savings bonus of up to 0.10%. To use Albert’s investment feature you can get a savings rate up to 0.25 percent and avail the personalized support for customers known as Genius, there’s the minimum monthly cost of $4. You need to have an external bank account for an account at Albert. Back to top Traveler-friendly Revolut Started in 2015 the UK-based Revolut provides attractive features to international travelers who want affordable exchange rates and a debit card that can spend in over 150 currencies. Customers can make international transfers with other Revolut users, and withdraw up to $300 per month at ATMs without fees, and get interest on savings. All this is included with the free account. For additional benefits, like international medical insurance, Revolut offers two accounts with monthly fees of $10 and $17. Read Revolut reviews: Revolut reviews: Wise The U.K.-based money transfer firm Wise which was previously known as TransferWise, created an account with multicurrencies that was rolled across to U.S. customers in 2017. There’s an initial $9 fee for the debit card, Wise doesn’t charge monthly account fees and converts currencies at an affordable exchange rate for a minimal upfront cost. For converting a balance of $1,000 U.S. dollars to euros is, for instance, approximately $4.20 which is 0.42%, which is cheaper than most institutions’ foreign-transaction fees of 1% to 3%. The account can contain multiple balances, storing up to 54 currencies at once and converting could be as quick as a matter of minutes. Check out Wise review: Return to the top of Freelancer-friendly Oxygen launched in the early part of 2020 The digital bank account of Oxygen aims to help freelancers and self-employed employees control the flow of cash. Oxygen doesn’t have monthly or ACH or overdraft fees There are however four pricing tiers for the account, ranging from zero to $200 per year. All levels offer travel benefits, such as lost luggage and hotel theft protection, and higher levels have more perks, including more savings rates, higher cash back and numbers of virtual cards. One unusual perk is the possibility to utilize the Oxygen application to incorporate, or legally register as a company in the future, and later . Review Oxygen review: Return to top Lili It was launched in 2019. Lili is a free mobile bank account that was designed with freelancers and independent contractors in mind. With Lili you can classify your expenses simply by swiping left to indicate “life,” or personal or personal, and the right side for “work,” or business. Lili offers tools to help freelancers save for taxes, as well as an emergency fund. In addition, if you use Lili’s account to deposit the earnings you earn from websites and payment apps you will receive the funds for up to 2 days earlier. This is a common feature across a variety of neobanks. Read Lili review The top Neobanks coming soon Keep an eye out for these four new neobanks’ launches in the near future: Daylight: Previously dubbed be Money, Daylight plans to create a mobile bank account focusing on members of the LGBT+ community with features such as access to financial experts and accounts with a person’s preferred name, not their legal name. Greenwood is a Black-owned digital banking firm currently has around half million customers on its waitlist for spending and savings accounts that emphasize reinvesting wealth in Black as well as Latinx communities. (See the list below of forthcoming and existing .) First Boulevard: The Black-owned banking platform is focused on low-cost banking and cash-back at Black-owned businesses, combined with short financial education videos. The goal of the platform is to create the wealth of generations to Black Americans. Purple: Purple plans to offer mobile banking specifically designed specifically for people with disabilities, including an account for checking and an account that is tax-advantaged, a savings account known as ABLE accounts. These accounts allow disabled people save money, without losing any government assistance. Also, there will be the debit card that will donate a portion of Purple’s revenue to the Special Olympics. Return to top From credit tracking tools to travel benefits Modern checking accounts provide more features than their predecessors had. Before you sign up, make sure to check whether the fintech company is a bank, or is in partnership with a bank. You can also determine which features will best suit your needs in the financial realm. Author bio Spencer Tierney is an expert in certificates of deposit at NerdWallet. Its work was highlighted in USA Today and the Los Angeles Times. In a similar vein… Find an alternative savings account NerdWallet’s recommendations for the top high yield savings accounts online. Go deeper into Banking Make smarter money decisions delivered straight to your inbox Sign up and we’ll send you Nerdy posts on the topics in finance that matter most to you as well as other methods to help you get more value from your savings.
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