16 Neobanks or Banking Fintech Firms and What They Offer 2024
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16 Neobanks or Banking Fintech Firms and What They Offer 2024

16 Neobanks or Banking Fintech Firms and What They Offer 2024

Neobanks set themselves apart by catering to particular groups, providing unconventional benefits, and more.

Neobanks are financial technology firms, often known as fintech companies. Typically, they provide desktop and mobile banking accounts with attractive features like free credit or cash-back benefits. Certain neobanks also provide credit cards, loans, investment goods, and high-yield savings accounts.

Neobanks typically don’t have physical locations and, as the majority don’t have bank charters, they collaborate with banks to offer FDIC-insured accounts. While every neobank mentioned in this article has an FDIC-insured account, not every account at neobanks that handle investments or other nondeposit activities does.

Our primary list features neobanks that we think are noteworthy or have promise but which NerdWallet hasn’t yet evaluated for its deposit accounts (see our methodology for details on how we arrived at this list). The second category includes neobanks that we have examined and deemed comparable in features, such as digital wallets like Venmo and Cash App.

Neobanks: Their role, disadvantages and benefits

Neobanks, often referred to as fintech companies, have been challenging traditional banks in the United States for over ten years. The now-defunct Simple launched its operations in 2009, long before the word “neobank” became popular. As of 2022, Simon-Kucher, a global business consulting firm, estimates that there will be about 400 neobanks globally. Neobanks are frequently distinct from online banks, which are internet-based financial institutions or branches of more established financial institutions as Ally, Capital One, and Marcus by Goldman Sachs.

Neobanks have a few drawbacks: Only 5% of neobanks globally, according to Simon-Kucher’s estimation, are profitable, underscoring a significant obstacle for this relatively new class of financial institutions. Furthermore, the battle to stand out has increased because once-novel offerings like free access to countrywide ATM networks and early direct deposit have become standard across U.S. neobanks. The failure process of neobanks is less well-defined than that of banks because a large number of them are not banks.

The motivations behind the adoption of neobanks are evident despite obstacles. Millions of customers have been lured by Neobanks’ checking and savings accounts because they offer more technology-driven benefits and more affordable fees than traditional banks typically do. Neobanks were really among the first to offer early direct deposit and waive overdraft fees. According to a 2021 NerdWallet study, they were also crucial in the COVID-19 pandemic during the initial delivery of stimulus payments. Furthermore, a few neobanks have arisen to concentrate on marginalized groups that traditional banks frequently ignore, such as Native Americans and Black people.

For credit and savings

If you fulfill specific requirements, HMBradley offers significant rates on savings. Your rate may increase in proportion to the more qualifications you meet. A solid monthly cash flow, at least $500 in deposits, and $500 in credit card purchases on a linked account are prerequisites. There aren’t any maintenance costs every month. You can also receive up to 1.5% cash back on purchases made with the associated credit card. Established in 2019, HMBradley collaborates with New York Community Bank, a branch of Flagstar Bank N.A., to provide depositors with FDIC insurance.

Oportun

Founded in 2005, Oportun provides a range of services, including investing and personal loans, in addition to credit and savings products. It offers FDIC protection for its banking products through partnerships with Pathward N.A. and other partner banks. Clients of Oportun who have a personal loan have free access to the Oportun app for a year. The app helps users create objectives, save more money, and avoid overdraft fees. Customers without a personal loan are eligible for a complimentary 30-day trial. After any free trial period, there is a $5 monthly cost.

For credit building

Sesame Cash

Founded in 2010, Credit Sesame is an online lender that specializes in helping those who live paycheck to paycheck. In March 2020, the company offered a free digital banking account. With a Sesame Cash account, you may receive credit monitoring alerts, your credit score, and a method of establishing credit history without the need for a credit card. Cash back is also available for debit card transactions. If you don’t satisfy these conditions, the account will charge a $9.99 monthly cost and a $3 inactivity fee. The inactivity fee is charged for any transactions, while the monthly price is charged for a minimum amount of direct deposits or purchases. Moreover, there is no customer service number. Community Federal Savings Bank and Credit Sesame collaborate to provide Credit Sesame’s FDIC-insured account.

MoCaFi

Launched in 2016, MoCaFi, or Mobility Capital Finance, is a Black-owned digital platform that collaborates with Sunrise Banks N.A. to offer free checking to underbanked and mostly unbanked areas, with an emphasis on narrowing the wealth gap between races. Customers can record rent payments to major credit bureaus through its bill pay service, which helps them establish credit history. Free mobile check deposits with quick money releases and free cash deposits at many merchants are two unique benefits offered by MoCaFi in collaboration with its third-party partners. For accounts that remain inactive for a year, a monthly inactivity fee of $5.95 is assessed.

Dave

Originally founded in 2017 as a paycheck advance firm, Dave has since grown to include spending accounts that allow users to round up purchases and save the difference. Along with building credit history through repayments, you can also receive a small advance on your next salary without paying interest or having your credit checked. Apart from the credit and savings functions, Dave also offers budgeting that accounts for future expenses and the opportunity to look for additional work through its mobile app.

Within the countrywide MoneyPass network, there are no fees for using ATMs or overdrafts, and there are no minimum balance requirements. Advances, which are provided as a last-resort overdraft option, do come with costs. Dave offers deposit customers FDIC insurance through a partnership with Evolve Bank & Trust. (Check out our evaluation of Dave’s salary advance program.)

Investor-friendly

M1

Launched in 2016, M1, or M1 Finance, is a digital company that started out as an online investing platform and has now grown to include savings and loan accounts. The competitive annual percentage yield of M1’s high-yield savings account is available to those who pay a $10 monthly subscription fee; otherwise, the interest rate is rather modest. The fact that M1 does not permit ACH transfer connections with over a dozen banks—especially those that have agreements with other neobanks—is another drawback. In 2021, M1’s CEO purchased B2 Bank, which the company partners with to provide FDIC protection for its savings account. M1 opened a checking account in the middle of 2020, however as of October 31, 2023, the company intends to liquidate all of its checking accounts.

Stash

Established in 2015, Stash provides an online account for users who wish to use their debit card for purchases as well as put money into investments. Fractional shares of matching stock are an added benefit for premium users who shop at specific brands. Depending on the subscription level, the fintech costs $3 or $9 a month for membership (the first month is free). Stash and Stride Bank N.A. collaborate to provide FDIC insurance for consumer savings. Keep in mind that investment balances lack FDIC insurance.

Acorns

In 2018, the 2012-founded microinvestment company Acorns entered the banking industry with Acorns Checking, moving beyond its automatic investing for investors who prefer to take a back seat. Having a single app to manage finances and invest a portion of every salary or debit card transaction is the primary selling feature. A restricted rewards program exists whereby specific purchases generate funds that are transferred to your investing account. Acorns offers three different account packages, with monthly costs ranging from $3 to $9. All tiers have access to Acorns Checking. Acorns offers an FDIC-insured banking account in partnership with NBKC Bank or Lincoln Savings Bank.

Albert

Albert began as a money management software in 2016 and in August 2021 it introduced Albert Cash, a tailored banking service. A cash-back earning bank account, Albert Cash offers no-interest cash advances of up to $250, integrated budgeting and savings tools, and a dedicated customer service called Genius that assists users with investing and automating saves. Albert collaborates with Sutton Bank to offer banking services, and also collaborates with Wells Fargo, Axos Bank, and Coastal Community Bank to offer FDIC insurance for savings accounts.

Traveler-friendly

Monzo

Monzo, a UK-based startup founded in 2015, will introduce its digital banking platform in the United States in 2022. The most noteworthy benefit of its spending account is that there are no foreign transaction costs, including no foreign ATM fees (except from those levied by the ATM owner). Real-time transaction alerts, the option to freeze a card in case it disappears, and the absence of overdraft or monthly fees are additional features that can be helpful when traveling. While chat assistance is available 24/7 on weekdays and for a restricted amount of time on weekends, phone support isn’t always available and may require a callback. Monzo offers its accounts via its collaboration with Sutton Bank.

Teen-friendly

Greenlight

The Greenlight app and card for children were released in 2017, and Greenlight Financial Technologies Inc. was established in 2014. Family-friendly features offered by Greenlight include the ability to set up spending limits and alerts, link tasks to allowance, and pool money for investments. Spending cash back is transferred to savings, where it may grow at a rapid pace based on your subscription plan. The Greenlight app’s collaboration with Community Federal Savings Bank enables it to provide financial services. Overdraft and ATM fees are not charged by Greenlight; nevertheless, there is a monthly cost, the amount of which varies depending on the plan you select. Additionally, Greenlight offers its solutions at no cost through its partnerships with certain banks and credit unions.

Step

Step is a 2018-founded company that provides a range of financial services and products to assist teenagers. Through Evolve Bank & Trust, one of its partner banks, it offers FDIC insurance on its deposits. Step offers a high interest rate on its savings account to clients who set up direct deposit and deposit $500 or more each month. Customers can set savings goals and round up their purchases to the nearest dollar using the app, which also lets them save money. Earning awards through spending and receiving payment two days ahead of schedule are other perks. Before they turn 18, Step also assists teenagers in investing and establishing their credit.

Migrant-friendly

Majority

Majority, which was established in 2019, offers financial services via its app and in collaboration with Sutton Bank and Axiom Bank N.A. Majority offers features that are particularly migrant-friendly, such as fee-free money transfers, unlimited free calls to roughly two dozen countries, low rates for calls to other countries through the Majority app, and customer support in multiple languages. Majority also does not require a Social Security number in order to open a checking account or debit card. Up to two days in advance, direct deposits are permitted and are covered by federal insurance. When using the debit card, Majority doesn’t impose overdraft or foreign transaction fees; nonetheless, there is a $5.99 monthly cost.

Comun

Established in 2021, neobank Comun was formed by Latinos and focused on providing services for the Latino population, including improved financial services access for migrants. During the registration process, applicants may provide a foreign passport, Social Security number, or other form of identification. The spending account is free of monthly fees and minimum balance requirements. It also integrates with a number of domestic and international money transfer apps, including Xoom and Remitly, which can be useful when sending money to friends and relatives who live abroad. There are just 1,500 ATMs for cash deposits at Walgreens and CVS, much fewer than at some other neobanks. Comun offers its financial services in collaboration with Piermont Bank.

Emerging

Bunq

Established in 2012, Bunq is a Dutch digital banking company that intends to expand into the United States after growing to become one of the largest neobanks in Europe thanks to its unique blend of profitability and European bank charter. Although Bunq’s website does not yet have the details of its U.S. account, a look at its European accounts reveals over fifty mobile banking features, such as joint savings accounts, the capacity to hold multiple currencies in one location (the main feature of a multicurrency account), the ability to budget and create subaccounts, and a Mastercard bearing the user’s selected name.

All of Bunq’s spending accounts, however, have monthly costs associated with them, and not every account may utilize every function. Neobank declared in April 2023 that it has submitted an application for a U.S. bank charter.

Totem

Totem established its platform in 2022 with the goal of facilitating Native Americans’ greater access to the mainstream financial system. It is regarded as the first and only Native-owned neobank. Candidates indicate their membership in a tribe while registering, and Totem collaborates with tribes. In addition to having no minimum balance requirements or monthly fees, the neobank offers standard neobank amenities including free countrywide ATM access and two-day early direct deposit. Totem collaborates with First Pryority Bank to provide FDIC-insured banking services.

Methodology

The neobanks, also known as fintech banking companies, that possess the following characteristics were mostly taken into consideration: no or low monthly fees for consumer spending and/or savings accounts; clear and helpful features that are not often offered by traditional banks; venture funding as a measure of industry interest; and search volume as a measure of consumer interest. Following a list of neobanks we’ve covered with links to our reviews, our list concentrates on neobanks that we haven’t yet reviewed for their consumer deposit accounts on our website. Reviews that concentrate on consumer deposit accounts are usually included when we’ve evaluated a neobank for several financial products.

Neobanks we’ve reviewed

These fintech companies adhere to the practice of collaborating with financial institutions to provide FDIC-insured deposit accounts.

Firm (select to read review)

Main perk

Partner bank(s)

Fee-free overdraft program.

  • The Bancorp Bank N.A.

  • Stride Bank N.A.

Fee-free overdraft program.

  • Choice Bank.

  • Cross River Bank.

High-yield savings account.

Coastal Community Bank.

Business account with no monthly fees.

Choice Financial Group.

Cash-back rewards at Walmart.

Coastal Community Bank.

Business account with no monthly fees.

The Bancorp Bank N.A.

Multicurrency account.

  • Metropolitan Commercial Bank.

  • Sutton Bank.

  • Cross River Bank (for credit accounts).

Cash-back rewards.

  • Cross River Bank.

  • Blue Ridge Bank (for credit accounts).

  • Sutton Bank (for credit accounts).

Multicurrency account.

  • Community Federal Savings Bank.

  • Wise is a licensed money transmitter in many states.

Neobanks that are online banks

While not common among neobanks, some do manage to obtain bank charters in order to function as banks. What makes them neobanks, then? Their features frequently resemble those of nonbank neobanks rather than online banks, the majority of which do not have checking accounts.

Firm (select to read review)

Main perk

Easy-to-get credit builder account.

High-yield savings account.

High-yield savings account.

Digital wallets with banking services

Peer-to-peer transfer apps, another name for these digital wallets, branched out into banking with debit cards and early direct deposit systems. A word of caution: Some balances at these digital wallets, like in-app balances from money transfers, are not covered by the FDIC. At partner banks, accounts linked to banking services including debit cards, direct deposits, and check deposits are FDIC guaranteed.

Firm (select to read explainer)

Main perk

Partner bank

High-yield savings account.

Synchrony Bank.

Investing features.

Sutton Bank.

Cash-back rewards.

The Bancorp Bank N.A.

Fintech firms with cash management accounts

While providing a certain kind of banking account known as a cash management account, certain nonbank fintech companies concentrate on brokerage or investment accounts. Features from checking, savings, and/or investment accounts are frequently combined in this account.

Firm (select to read CMA review)

Main perk

Partner bank(s)

Cash-back rewards at eco-friendly merchants.

  • Coastal Community Bank.

  • Several other banks.

High-yield cash account.

  • Citibank.

  • Several other banks.

High-yield cash account.

  • Green Dot Bank.

  • Many other banks.

Contemporary checking accounts come with additional features than their forebears, such as travel benefits and credit monitoring tools. However, before purchasing one, find out which features would best suit your financial situation and whether the fintech company is a bank or works in conjunction with a bank.

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