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 sound financial decisions without hesitation. And while our site doesn’t include every business or financial product available in the marketplace We’re pleased that the guidance we offer as well as the advice we offer and the tools we develop are objective, independent simple, and cost-free. So how do we make money? Our partners compensate us. This may influence which products we review and write about (and the way they appear on the website) however it does not affect our suggestions or recommendations that are based on thousands of hours of research. Our partners do not be paid to ensure positive ratings of their goods or services. . 19 Neobanks and what they offer Neobanks distinguish themselves by focusing on specific communities, offering various benefits and more. Written by Spencer Tierney Senior Writer | Certificates of deposit, ethical banking, banking deposit accounts Spencer Tierney is a consumer banker at NerdWallet. He has written about personal finance since 2013, with a focus on certificates of deposit as well as other banking-related subjects. His work has been featured by The Washington Post, USA Today, The Associated Press and the Los Angeles Times, among others. He is located in Berkeley, California. Sep 23rd, 2021 Edited by Yuliya Goldshteyn Assistant Assigning editor Banking Yuliya Goldshteyn works as a banking editor at NerdWallet. She previously worked as an editor, writer , and research analyst in industries ranging from healthcare to market research. She graduated with a bachelor’s degree in the field of history from Berkeley at the University of California, Berkeley and a master’s degree in social sciences from the University of Chicago. You can reach her at
. Many or all of the products featured here are from our partners, who pay us. This affects the products we feature as well as the place and way the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a listing of . The information about investing on this page is for informational purposes only. NerdWallet does not offer advisory or brokerage services and does not recommend or advise investors to buy or sell certain stocks, securities or other investment options. You can jump to a specific Neobank or category for high-yielding savings: For widest selection of accounts: low-cost overdrafts: for credit-building: Cash-back rewards:| | Investor-friendly: Traveler-friendly: Neobanks are financial technology — also known as fintech companies which typically provide mobile-friendly accounts that are brimming with attractive features such as low-cost cash-back or credit card rewards. There are some established Neobanks that offer loans and credit cards, as well as investing productsas well. They usually have no branches and, since most neobanks don’t have banking licenses, they collaborate with banks to offer protection by their Federal Deposit Insurance Corp. In addition, they offer. The majority of the neobanks in this list have FDIC-insured accounts. Savings Cash Management CD checking Money Market member FDIC SoFi Savings and Checking APY 3.75% SoFi members with direct deposit are eligible to earn up to 3.75 per cent annually in percentage (APY) on savings balances (including vaults) and 2.50 percent APY on their checking balances. No minimum direct deposit amount required to qualify for the 3.75% APY for savings and 2.50% APY on checking balances. Direct deposit members will get 1.20% interest on balances of savings and checking (including Vaults). The rates of interest are variable and may change at any point. These rates 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 Goldman Sachs Online Savings Account APY 3.50 35% 3.50% APR (annual per cent yield) with a minimum balance of $0 to earn the APY stated. Accounts must be in healthy balance to continue to operate. APY current as of 02/07/2023. Min. balance for APY $0 These cash accounts provide a range of services and features similar to checking, savings or investment accounts in one product. The cash management account is generally provided by non-bank financial institutions. These cash accounts combine features and services that are that are similar to savings, checking or investment accounts into one product. The cash management account is typically provided by non-bank financial institutions. On the website of Wealthfront, you can find Wealthfront Cash Accounts APY 4.05% Min. Balance of APY $1 on the Betterment’s website. Betterment Cash Reserve – Paid non-client promotion APY 4.00 Percent Annual percentage return (variable) is as of 02/06/2023. Min. balance for APY $0 CDs (certificates of deposits) are a type of savings account with a fixed rate and term generally, they come with higher rates of interest than regular savings accounts. CDs (certificates of deposit) are a type of savings account that has fixed rates and terms which usually come with higher rates of interest than standard savings accounts. CIT Bank CD Annual Percentage Yield 4.60% Term 1.5 Years Member FDIC Marcus by Goldman Sachs High-Yield CD APY 4.40% 4.40% APR (annual percentage yield) as of 01/25/2023 . 1-year Checking account can be used for cash deposits on a regular basis as well as withdrawals. Checking accounts are utilized for day-to-day cash deposits and withdrawals. FDIC SoFi Checking and Savings APY 2.50% FDIC SoFi Checking and Savings APY 2.50% SoFi members with direct deposit can 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. The minimum amount of direct deposit needed to earn the 3.75% APY on savings, or the 2.50% APY for checking balances. Customers who do not deposit direct deposits will receive 1.20% APR on all balances in checking and savings (including Vaults). Interest rates are variable and subject to change at any time. The rates listed 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. Use Your Axos Visa(r) Credit Card for a total of 10 transactions each monthly (min three dollars per purchase) or sign up for Account Aggregation/Personal Financial Manager (PFM) within Online Banking to earn 0.30% APY. Keep an average daily amount of $2,500 within An Axos Managed Portfolios Invest Account for 0.20% annual percentage yield. Maintain an average daily balance of $2,500 per month within the Axos Self Directed Trading Invest Account to earn 0.20 percent annual percentage yield. Make use of your Rewards Checking account for your full each month Axos consumer loan payment to earn 0.15 percent APY. Monthly fee of $0. Market accounts earn rates that are similar to savings accounts and have some checking features. Market accounts earn rates that are similar to savings accounts and have some checking features. Member FDIC UFB Best Money Market APY 4.21% Min. balance for APY 0 Member FDIC Discover Bank Money Market Account APY 3.20% Min. Balance for APY $1 >> Learn more: The amount of fintech firms that can be termed neobanks continues to grow. From 2018 to 2020, Neobanks grew by 60-256 worldwide according to a study by the business strategy company Exton Consulting. With the rise of more players comes more competition. And some previously innovative services are becoming more common for neobanks. These include two-day early 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 these features. Neobanks are finding ways to distinguish themselves by appealing to certain people, like freelancers and tourists from other countries, as well as providing perks you might not find in traditional banks. This article will provide an overview of the ways that some of the upcoming and current Neobanks attempt to stand out. >> Learn more: For high-yield savings Chime Founded in 2013, Chime is one of the largest neobanks that has more than twelve million clients. Partnered with two banks*, it provides savings and checking accounts that are both free of charges for monthly usage, as well as a secured credit card that you can use to build credit. Chime’s savings account offers a competitive interest rate of 2.00 percent annual percentage yield** , with no minimum balancerequirement, no maximum limit for earning interest, and no monthly costs. (The Chime Checking Account must be opened to open a savings account; the Savings Account is optional.) The spending account gives you free access to more than 60,000 ATMs*** across the country and, for customers who make direct deposits, a fee-free overdraft program that covers the amount of $200. Cash deposits are available at major retailers ****, a service not every neobank offers. Sign-up procedures are simpler than traditional banks as there’s no verification of credit or previous banking records however, Chime is a . Find more details from Chime *Chime states: “Chime is a financial technology firm, not a bank. Banking services provided by 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 Chime Savings Account is subject to change and could alter at any moment. The declared APY will be in effect as of October 25, 2022. No minimum balance required. You must be in possession of $0.01 of savings in order to receive interest. ” ***”Out-of-network ATM withdrawal charges may apply except at MoneyPass ATMs at 7-Eleven store, or at any Allpoint or Visa Plus Alliance ATM.” ****”The retailer who takes your cash is accountable for the transfer of funds to deposit into your Chime checking Account. There may be fees for cash deposits if using a retailer other than Walgreens.” Review Chime reviews: Back to top Varo Bank Varo Bank offers savings, checking and cash advances. Founded in 2015 and originally operating with partnership with banks, the bank was made an officially chartered bank in August 2020. This allowed it to provide their very own FDIC insurance. As per Varo, it had a total of 6 million customers by mid-year 2022. The checking account has access to a free ATM access, and there are no monthly fees, in addition to benefits like cash back at specific retailers as well as no international transaction charges. Its savings account has a couple requirements to earn the highest rate of 5.00% APY on the first $5,000 of savings, which includes a $1,000 minimum in monthly direct deposits as well as an active savings and checking balance at the end of each month. In other cases, you earn 3.00% APY. Read Varo review Return to top for widest selection of account types SoFi SoFi is which stands in the sense of “Social Finance” was founded as a student loan refinance company but recently received its own bank charter. The SoFi Savings and Checking account is a account that allows the money to spend and save. It has no account fees for overdraft, ATM usage, or monthly maintenance (subject to change at any time). Some perks include earning interest, creating subaccounts for savings as well as, for customers with qualified direct deposits, free overdraft coverage that can be up to $50. SoFi also offers a range of loans including active and automated investment as well as cryptocurrency trading, credit cards, and retirement accounts. Review SoFi: — Return to top for a low-cost overdraft One is owned by Walmart One’s bank account has a cheap overdraft plan, a custom budgeting and savings choices. Customers can choose to arrange their funds into subaccounts called Pockets. The Pockets dedicated to saving have rates of 1% for up to $5,000 per customer and 1% for up to $25,000 in the case of customers with direct deposit. One gives free overdraft coverage as high as $200 for customers with direct deposits of at least $500 per month. This is less expensive than banks with large branches’ overdraft fees that can range from 35 cents per transfer. Read reviews on One:More information about credit building GO2bank (and GoBank) Green Dot Corporation has been offering alternative banking products since 1999. From prepaid debit cards and later expanding 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, that require an online sign-up, you can pick up GoBank as well as GO2bank cards at retailers such as Walmart and then activate them online to use with a mobile app. Between the two brands, GO2bank is the best choice, with a lower monthly cost and perks but less than other neobanks like Chime and Varo. GoBank’s $9 per month fee is waived when you make $500 direct deposits. GO2bank’s $5 monthly fee is waived when you deposit direct without a specified minimum. Alongside the bank account, GO2bank provides a secured credit card to increase credit score and an account for savings that earns an APY of 1% for the amount of up to $5, 000. However, GoBank doesn’t offer a credit card and its savings vault does not earn interest. Check out the GoBank review: Read more about GO2bank: Back to the top Sesame Cash The credit company Credit Sesame launched a free digital banking account in March 2020 . The account focuses on serving people living pay-to-pay. The account’s features include access to direct-deposited paychecks up to two days in advance in advance, mobile check and cash deposits as well as a restricted debit card cash-back program, and free access to a national ATM network. Through the account, users have access to Credit Sesame’s free monitoring of credit scores and daily updates to credit scores. • Compare the Top to Back MoCaFi MoCaFi or Mobility Capital Finance, is a black-owned digital platform launched in the year 2016 that provides free checking for 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 report rent payments to major credit bureaus to build credit history. It is a unique perk. MoCaFi collaborates with third-party partners to give free cash deposits at various retailers and free mobile check deposits that allow for quick cash out. Then back to the the top Dave Dave started in 2017 as a paycheck advance company and grew to include a full-fledged checking account. By the middle of 2021, it had around 1 million clients. You can receive a small advance on your next salary without any interest or credit check. Customers with at least $1,000 in monthly direct deposits can build credit history through rent payments. Dave also offers budgeting tools that includes upcoming expenses and the option to search for side-jobs on its mobile application. There are no charges for overdrafts , or using ATMs within the nationwide MoneyPass network, and there aren’t any minimum amount of balance required. Read Dave review: Back to top For cash-back rewards Current Current, founded in 2015, offers no-cost and premium checking options that include cash back at some merchants, two-day direct deposit, and quick refunds on gas station hold on cards. The two other perks are only available for premium accounts that have a $5 monthly fee. Premium accounts that make direct deposits can also have the possibility of having up to $100 worth of overdrafts backed up at no cost. Review Current review: Revert to the top Upgrade A personal loan company Upgrade began operations in the year 2017, launched a free 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 the cash back of 2% for everyday purchases, like at drugstores and restaurants as well as 20 percent rate discounts on personal loans. Customers can also view their credit scores no cost and a summary of their credit reports through their Credit Health service. Read Upgrade reviews: Bella Bella’s banking strategy is, in the words of its website, “built on love.” That translates to the rewards program for checking accounts which offers a variable percentage of cash back, between 5% and 200%, on randomly selected purchases. The program was introduced in 2020. Bella doesn’t charge monthly ATM, overdraft or other fees. At present, Bella also covers fees for out-of-network ATM operators. There is also a no-fee savings account, but it has minimal interest rates, and an optional “karma account” that is a savings account to help pay for other customers’ small purchases or as a beneficiary of another’s generosity with karma accounts. Check out our list of the Back to top Cheese Started in March 2021. Cheese tailors its digital banking platform for the immigrant and Asian American communities with up to 10% cash back for 10,000 businesses, which includes Asian-owned restaurants and businesses. Customer support is available in English as well as Chinese and will be available in more languages soon. Accounts earn interest and don’t have monthly fees or ATM fees within the national MoneyPass ATM network. Find out the details about Back to top Investor-friendly Acorns The microinvesting app Acorns main product is an automated investment for investors who don’t have hands, it expanded into banking in the year 2018 with Acorns Checking. The account includes a debit card and limited rewards program, and is available only in a package with a taxable investment account and individual retirement accounts, at a cost of $3 per month (or the equivalent of $5 per month for a family-friendly version). Customers can choose to participate in the “round-up” option where every purchase is rounded up by some amount and the change is then invested. The rewards program involves receiving an amount or a portion back from purchases at over 300 companies. The money is also invested. Read Acorns review: Back to the top Aspiration Aspiration is an online brokerage company that has the cash management account known as Spend & Save, that is the hybrid savings and checking account. There are two different versions of the account. The basic Spend & Save account has the potential to earn up to 3.00% interest on savings, and up to 5% cashback and an optional monthly fee that customers pay the amount they believe 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% APY. There are two accounts to choose from as well, which means you can invest in businesses that are sustainable business practices and social causes. As a certified B Corp company, Aspiration is committed to being an environmentally and socially conscious firm and offers customers individual sustainability scores that are based on which businesses they invest in. Check out the Aspiration review: Aspiration Spend and Save Accounts are cash management account that are available by Aspiration Financial, LLC, an authorized broker-dealer, Member FINRA/SIPC, and a subsidiary that is part of Aspiration Partners, Inc. (“Aspiration”). Aspiration is not a financial institution.” The Aspiration Save Account’s up to 5.00 percent Annual Percentage Yield (“APY”) that can be up to 83x the national interest rate is subject to change, subject to change, and is only accessible to customers who are enrolled in Aspiration Plus after conditions are met. Customers who aren’t enrolled in Aspiration Plus receive 3.00% APY when the conditions are fulfilled. Then they can go back to the top. Albert Albert started in 2016 as a financial management app and then launched a personal banking service called Albert Cash in August 2021. It has over six million customers. Albert Cash is a banking account that offers cash back and includes the following benefits that include no-interest cash advances up to $250 with integrated budgeting and saving tools, and annual savings bonuses that can reach 0.10%. To access Albert’s investing feature, get a savings rate up to 0.25 percent, and take advantage of its personalized customer support known as Genius There is the minimum monthly cost of $4. It is required to have an external bank account for an account at Albert. Back to top Traveler-friendly Revolut Started in 2015 the UK-based Revolut offers appealing features to international travelers looking for affordable exchange rates and a debit card that can use more than 150 currencies. Customers can transfer funds abroad together with other Revolut users, withdraw as much as $300 per month at ATMs without fees, and get the interest from savings. That’s all with the free account. For more perks, including medical insurance for overseas patients, Revolut offers two accounts that charge monthly fees of $10 and $17. Review Revolut reviews: Return to top Wise Review: U.K.-based money transfer firm Wise was previously known as TransferWise established a multicurrency account that rolled out to U.S. customers in 2017. Although there’s an initial $9 fee for the debit card, Wise doesn’t charge monthly account fees and converts currencies at a fair exchange rate for a minimal upfront cost. Converting a balance of $1,000 U.S. dollars to euros is, for instance, about $4.20, or 0.42 percent, which is cheaper than banks’ foreign transaction fees of 1% to 3%. A bank account can hold multiple balances, holding at least 54 foreign currencies at once and the conversion process could take just a few two seconds. Read Wise review: Return to top of the list Freelancer-friendly Oxygen launched in the early part of 2020 The digital bank account of Oxygen aims to help freelancers and self-employed people manage their cash flow. Oxygen does not cost monthly fees, ACH as well as overdraft costs, but there are four pricing tiers for the account, ranging from free to $200 annually. All levels offer advantages for travel, including loss of luggage and hotel theft protection, and higher levels offer more benefits such as greater savings rates, cash back and more virtual cards. One unique benefit is the option to use the Oxygen app to incorporate, or legally become a company after which you can then . Review Oxygen review: Return to top Lili It was launched in 2019. Lili is a mobile bank account that was designed for freelancers as well as 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 also has tools that help freelancers save to pay taxes and also an emergency fund. In addition, if you use Lili’s account to deposit your earnings from online platforms and payment applications You can get your funds as early as two days before the due date. This feature is standard across a variety of neobanks. Check out Lili review: Back to top Neobanks coming soon Keep an eye out for these four new neobanks’ launches in the near future: Daylight: Previously known as be Money, Daylight plans to launch a mobile bank account focusing on people in the LGBT+ community with features like access to financial advisors and accounts that use a user’s chosen name, rather than the legal one. Greenwood is a Black-owned digital banking company currently has around half million people waiting on its list for spending and savings accounts which focus on reinvesting money in Black as well as Latinx communities. (See the list below of the upcoming and ongoing .) First Boulevard: The Black-owned banking platform focuses on low-cost banking and cash-back at Black-owned companies, and short financial education videos. Its aim is to create generational wealth for Black Americans. Purple: Purple plans to offer mobile banking specifically designed specifically for those with disabilities. It will include an account for checking and savings accounts that are tax-advantaged. These accounts are known as ABLE accounts. These accounts allow people with disabilities save money, without the loss of any government assistance. There will also be an account that can be used to donate some of the money earned by Purple for the Special Olympics. Back to top From credit monitoring tools to travel benefits modern checking accounts offer greater benefits than the old ones offered. Before signing up for one, verify whether the fintech business is a bank, or is in partnership with a bank, and consider which features best serve your financial life. About the author: Spencer Tierney is an expert in the field of deposits and certificates at NerdWallet. Its work was highlighted by USA Today and the Los Angeles Times. In a similar vein… Get the best savings account NerdWallet’s picks for the best high-yielding savings accounts online. Go deeper into Banking Get more smart money moves – straight to your inbox Sign up and we’ll send you Nerdy articles on the topics in finance which matter to you the most and other strategies to get more value from your money.
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