10 Best Online Neo Banks of 2022

Neobanks are the future of accessible banking. 

Table of Contents:

Which Neobank is the best?

How do Neobanks make money?

Why is it called a neo bank?

Is Neobank safe?

How do Neobanks work?

Can Neobanks accept deposits?

Can Neobanks lend money?

How many Neobanks are there in the US?

What are the advantages of Neobanks?

Which Neobank is the best?

The rise of Neobanks has led to a variety of different online banking options. Choosing which one is best for you will widely vary depending on the main banking needs that you have. Currently, the top 10 most popular and safe online banks to use are: 

1. Revolut

This UK-based Neobank has an operating banking license in the European Union. As Revolut aims to become the first global bank it has also expanded its services to the USA and is slowly spreading to Asia too. This means that if you are looking for a bank that you can use from wherever you are as you travel or move around, you will find what you are looking for in Revolut. 

Some of its key features include: 

• You can use over 150 currencies and can exchange between standard currencies without paying a fee

• Investing opportunities include the ability to buy and sell cryptocurrencies and stocks

• Specialized children account

• Easy saving and automatic savings options with vaults

2. Wealthfront Cash 

Wealthfront Cash can be particularly good if you are looking for a cash management account and cash management options. They also offer some advisory options that can help you make the most out of your savings and investments. 

Some of its key features include:

• An APY of 0.10% with $0 for having an account

• No minimum balance requirement for your account

• FDIC insurance for up to $1 million

• Debit card can be used to make purchases and take out cash 

3. N26

N26 is a German-based Neobank that offers its services in the United States and within European countries in the Single Euro Payments Area (SEPA). Apart from their personal accounts they also offer business account options.  

Some of its key features include:

• Basic current account does not have any fees

• Payments are free worldwide

• Option to have a debit Mastercard

• 0.1% cashback is available

4. Current

Current is a US-based Neobank that was founded in 2015 and currently has over 2 million users. It has good customer service and positive things have generally been written about its application. 

Some of its key features include:

• A Fee-free overdraft is available

• Saving features are integrated into the app

• Direct Deposit options are also available

5. Chime

Chime is a US-based Neobank that is partnered with Bancorp Bank and Stride Bank. What makes this one of the best Neobanks available is the fact that they offer high-yield accounts and high-interest rates. 

Some of its key features include:

• Debit and Credit Card services

• High-yield online savings accounts with 0.50% APY.

• Fee-free overdraft  

• Competitive interest rate on savings accounts

• No minimum balance

• No monthly fees 

• Automatic savings account 

6. Cleo

Cleo is an innovative Neobank that employs a combination of artificial intelligence and financial technology. There are two accounts available for this money management service, Cleo and Cleo plus. Cleo plus is a monthly subscription service that is currently only available in the USA and it includes many features including credit score advice. 

Some of its key features

• Salary advance 

• Spending tracker and budgeting features

• Saving money management tools

• Credit score coaching

7. Qube Money

Qube Money is a budgeting and banking app that has the backing of the Choice Financial Group. One of its more unique elements is the fact that they offer digital cash envelopes. Using those organizing features to sort through your saving and spending categories can bring many positive results to your finances. 

Some of its key features include: 

• Digital cash envelopes 

• Debit card provided

• Budgeting features

8. Sable 

Sable is a US-based Neobank that offers personal accounts that can be managed through their iPhone and Android application. Only US residents are currently able to open Sable accounts. 

Some of its key features include:

• debit cards

• $0 annual and monthly fees

• Rewards of up to 1% for their debit card

9. Aspiration 

Aspiration is a Neobank that offers cash management accounts, credit cards, investment opportunities, and sustainable impact services. 

Access to their services is exclusively done through their mobile apps, available for both Android and iPhone users. 

Some of its key features include:

• Cashback opportunities

• A carefully thought-out fee structure for basic memberships

• FDIC insurance up to $2.5 million

10. Varo

Varo offers a variety of saving tools and products. The bank is completely online but it does have an active fee-free ATM network. Cash deposits are also available through some select third-party retailers that charge fees.

Some of its key features include:

• No monthly fees.
• High APY on certain accounts
• Availability of cash deposits
• Fee-free ATM network
• Savings accounts and automation tools for saving

How do Neobanks make money?

The most common way for Neobanks to make money is through the interchange. Interchange is the fee paid by merchants when their customers use debit cards to complete a certain purchase. With Neobanks that interchange percentage can be up to seven times higher than those that traditional banks charge, which is why it is also the predominant way in which they make money. Some percentage of their revenue also comes from ATM withdrawals made from non-fee-free ATMs.

Why is it called a Neo bank?

A Neobank, also known as an online bank or a virtual bank, is a bank that does not have any physical branches but instead operates exclusively through its online services without a physical presence. The term was coined in the mid-2010s and it was used to describe fintech financial products that were challenging existing banks. Because of the innovation associated with these products and banks, the term Neobank was coined and began being used to describe these banks. Neo originally derives from the Greek word for new, and therefore with the term Neobank a new type of bank is described and coined.

Is Neobank safe?

Most Neobanks are extremely safe as they will often have some of the same protection measures in place as those found in traditional banks. For example, US-based Neobanks will often have FDIC insurance on many of their savings and checking accounts to ensure that their client’s money will remain safe. Usually, there are also other security measures in place, and neobanks often have to follow the same banking codes of practice and security measures that traditional banks follow. 

How do Neobanks work?

Neobanks are fintech companies that offer their services exclusively online. This means that all users looking to use one of these banks will need to be able to access them online and to use their phone mobile apps or websites. The lack of physical branches allows neobanks to save on the costs of operating and thus they are often able to provide some checking and savings accounts for free. 

For users who want to sign up with a Neobank the process is usually very simple and easy. After downloading the app that is associated with the Neobank they want to sign up for, they will usually be asked to provide information regarding their place of residence, as well as an identification document. At times, they may also be required to make their first deposit into their account to start using their accounts. Neobanks for the most part, are not yet able to completely replace traditional banks. In part, this is because they tend to offer a much more limited number of financial services. In fact, the services that they usually offer include investment opportunities, savings accounts, and checking accounts. Most Neobanks do not currently have in place any lending services that can be used from account holders. This means that if you are looking for the perfect lender for your future mortgage you will most likely need to direct your attention to a traditional bank over a Neobank. 

Can Neobanks accept deposits?

Most neobanks, with the exception of a few ones such as Varo, do not accept cash deposits. This is because unlike traditional banks they do not have a physical branch that clients can go to and directly deposit cash. Instead of cash deposits, most neobanks allow you to either deposit money to your account through your bank card or a direct deposit from another bank account. 

This means that if you wanted to deposit cash into your bank account you would need to do it by following the steps outlined below. 

1. Visit your traditional bank and deposit your cash into an account

2. Using a debit or credit card deposit the amount into your neobank. You can also use a direct deposit or money transfer to transfer your desired amount into your Neobank. 

Can Neobanks lend money?

Most Neobanks currently do not offer lending services. However, there are exceptions to that rule. For example, SoFi bank offers both personal loans and mortgage options to those looking for them. These accounts can at times come with good terms and they are as secure as traditional bank loans would be. For SoFi specifically, applications for mortgages are assessed through an examination of the following categories. 

•  Payment history 

 •  Credit utilization 

 •  Length of credit history

 •  Types of credit

 •  New inquiries.

Apart from mortgages SoFi also offers refinancing options and home equity options. For all of those, you can directly use their website and calculator to estimate how much you would be able to take out in a loan.

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How many Neobanks are there in the US?

There are currently 58 Neobanks that are available to US customers. Most of them are US-based but others are not.

A full list of all neobanks available in the US and the country they are headquartered in: 

1. Acorns – United States
2. Ando – United States      
3. Arival – United States     
4. Aspiration – United States            
5. Atmos – United States    
6. Azlo – United States
7. Bambu – United States  
8. Bank Mobile – United States       
9. Betterment – United States         
10. Bridge Money – United States    
11. Capway – United States 
12. Cheese – United States  
13. Chime – United States    
14. Cogni – United States  
15. Copper – United States  
16. Current – United States 
17. Dave – United States      
18. Daylight – United States 
19. Empower -United States              
20. Envel -United States       
21. Finch – United States      
22. GoBank -United States  
23. GoHenry – United Kingdom         
24. Greenlight -United States
25. HMBradley – United States
26. JUNO – United States     
27. Lance – United States    
28. Lili – United States
29. M1 Finance – United States         
30. Majority – United States 
31. Mercury – United States
32. MoneyLion – United States
33. Monzo – United Kingdom
34. Moves – United States   
35. N26 -Germany  
36. Neat – Hong Kong
37. North Loop – United States          
38. Northone – United States
39. NOVO -United States
40. ONE -United States        
41. OnJuno -United States   
42. Oxygen – United States
43. Point -United States
44. Qube Money- United States       
45. Revolut -United Kingdom
46. Sable- United States
47. Save -United States        
48. Simple -United States
49. Sofi-United States
50. Stash-United States        
51. Step-United States
52. Upgrade – United States 
53. Varo-United States         
54. Wicket – United States  
55. Wise (TransferWise) -United Kingdom    
56. Yotta – United States      
57. Zero – United States       
58. Zeta – United States

What are the advantages of Neobanks?

 There are many advantages associated with having Neobanks. This is because this modern banking solution can provide many easy-to-use features that are accessible to all of its users. Most commonly the biggest advantages include: 

1. Lower fees

Most Neobanks offer their banking products and accounts without any fees. In the small number of neobanks that fees are required those fees tend to be much lower than the ones found in traditional banks.

2. Financial protection

Neobanks much like traditional banks offer FDIC insurance for security meaning that you will not need to worry about potential money loss.

3. Competitive interest rates

Many Neobanks offer competitive APYs which is also part of the reason that many traditional banks have chosen to increase the APYs they offer for their high-yielding accounts to compete.

4. Accessibility

Perhaps the biggest benefit of using neobanks is that they are accessible from wherever you are and their online apps tend to be extremely easy to use.

5. Perfect for travel

Those who travel a lot will appreciate the lack of fees that comes with using Neobanks abroad. In some banks, you can even convert your money to any currency of your choosing. This can help save you a lot of money in exchanges.

6. Easy savings

Most Neobanks have many savings features associated with them. If you are looking to save for your future home deposit or any other purchase, these tools can help transform the way in which you save.

Summary

Neobanks are a new way of fulfilling all of your banking needs from wherever you are in the world. With competitive APYs and great saving products, they can be the best option for those looking to save for a big purchase or a deposit. Many Neobanks also offer mortgages and refinancing options which can come with great terms.