About

We aim to provide unbiased information on Neobanks offering accounts to consumers and businesses in the US.

What is a Neobank?

Neobanks (or Challenger Banks) are technology innovators founded to disrupt the antiquated traditional banking market. Most are mobile-first app-based services with low to no fees, targeting a generation of customers accustomed to managing everything online rather than wasting time traveling to physical branches.

Are US Neobanks FDIC insured?

Most Neobank products are actually a customer-facing tech product backed by a fully FDIC-insured chartered bank. Your account at a Neobank is covered by their partner bank's insurance. Neobanks generally exist exactly because there are tens of thousands of chartered banks in the US, and even the largest ones are do a terrible job at implementing customer-facing technology such as mobile apps for Android, iPhone, and responsive web portals. Because of this, some very open-minded chartered banks like to partner with innovative tech companies who operate as Neobanks. In some cases, it is actually more cost-effective to bank with a neobank brand than to open an account directly with their partner bank.

Are there Neobanks outside of the US?

Yes. In fact, many of the early innovators in the Neobank market were founded in Europe. We currently focus on the brands offering accounts to the US because these are a newer phenomenon and we are based on the US.

How do Neobanks in the US make money?

Most Neobanks share interchange fee revenues (a portion of processing fees, at no extra expense to you the consumer, when you use your debit card to make purchases) and/or collect interest on deposits with their partner banks. Some also offer loans and credit. These are typically the same sources of revenue as traditional banks but some Neobank products also offer additional perks unique to their brand. In general, the cost of doing business with a Neobank is actually lower for consumers and these fee structures are actually helping to drive down the costs imposed by some traditional banks.