Neobanks | Are They Best for You?

Neobanks are a relatively new introduction to the financial services industry, offering many banking services and financial products to rival big banks.

However, their business models are entirely different, having embraced newer technologies such as digital banking and blockchain while emphasizing user experience and ease of use.

Since most neobanks are effectively a digital bank startup, they don’t have the red tape and formalities usually associated with traditional banks.

And that’s what appeals to a different customer base – mostly millennials and tech-savvy customers who still care about their personal finance.

Their widespread adoption has led to incredible valuations, which in turn has given these challenger banks more cash to continue innovating their mobile apps.

In This Article

What Is a Neobank?

Neobanks, often called challenger banks, are a new breed of banks that have been challenging the banking norms that have been established for many years.

While they’re primarily fintech (an abbreviation of financial technology) companies, they offer many of the basic services that most of the best banks offer. But they do so at a lower price and in a more attractive package to the technology-savvy consumer.

Neobanks do not have any physical branches and, in most cases, operate (at least primarily) through an app. Their apps tend to be more efficient and feature-rich than those offered by banks, which is why they are taking off the way they are.

By treating the app as the primary interaction device, the apps feel more natural than those that are an extension to a bank account. That often means people have a greater degree of control over how they spend their money.

Because they have no physical branches, they also tend to offer products and services at a much lower cost. Their entire monetization strategy is built around web principles to offer free and paid premium subscription services.

That’s very different from what traditional banks offer and is something that modern consumers know better.

The pandemic has also shown that branches may not be so important after all. Even traditional banks who banked on having branches as one of their selling points had to shutter them down.

One could argue that this has been a boost to what many perceived to be a con of neobanks and ultimately showering that online is the way forward,

How Safe are Neobanks?

Generally speaking, neobanks are very safe since they operate within a regulated market. To ensure that the bank is as safe as possible, make sure you check out where it’s located and under which jurisdiction it operates.

We are also seeing a lot of European neobanks looking to tap the US market. Revolut and Monzo are two such banks.

Although new to the US, these kinds of banks have proven themselves on the other side of the pond.

They also often work with US banks to offer FDIC-insured accounts – usually for far higher amounts than traditional banks offer.

Best Neobanks for What You Enjoy

Unlike traditional banks, neobanks have veered off the one size fits all model.

Each one of them offers that something special that will undoubtedly appeal to different kinds of users.

This section will review the top neobanks according to the type of customer they appeal to, helping you choose the right one according to what you enjoy doing the most.

Revolut: For the Traveler

Revolut is a UK company that has slowly been expanding globally. Last year it established offices in the EU and the US and, in many ways, has been a driving force behind the adoption of challenger banks with the mass market.

Their account accepts some 150 different currencies, and the company doesn’t charge fees for exchanging standard currencies.

That means you can use your Revolut card to hold and spend money around the world, hassle-free.

You also get access to vaults that can help you save money for upcoming expenses or projects, earn cash back rewards when you spend, and even order special cards to support causes.

Recently, Revolut added the ability to buy and sell several cryptocurrencies,  stocks, and Junior – an account for kids aged between 7 and 17.

Parents can deposit allowances and set up rules to teach their children the importance of money.

Aspiration: For the Eco-Conscious

Under the motto “Do Well. Do Good.”, Aspiration aims to help you align your values with your banking and spending, by vowing not to let your deposits fund oil projects, offering up to 10% cash back on Conscience Coalition purchases, and providing an impact score revealing the social and environmental impact of the businesses you’re shopping.

They offer cash accounts, savings, and a couple of investment accounts. They also recently launched their Zero credit card, which plants a tree every time you swipe.

Aspiration Logo

Earn a $300 Bonus

for opening an Aspiration Zero account
Available nationwide

Learn how
Aspiration Logo

Earn a $200 Bonus

for opening an Aspiration Plus account
Available nationwide

Learn how

Chime: For the Saver

Chime is a neobank that can help people improve their financial situation. There are three types of accounts available, including a Spending Account, Credit Builder, and Savings Account (with an APY of 0.50%).

If you qualify for SpotMe, you can get up to $200 in fee-free overdraft while paychecks arrive up to 2 days earlier (no credit check required!).

If your credit score is hurting, you can improve your score by as much as 30 points with Chime’s secured credit card. Speaking of credit cards, you get fee-free withdrawals from over 38,000 ATMs.

Chime’s app features many security-related functions, including the ability to block debit card transactions and alerts whenever there’s a transaction on your card.

You can also deposit checks straight from the app, and transfers are a breeze.

Unifimoney: For the Money Manager

Unifimoney aims to reclaim some of the $20 trillion that millennials stand to lose over their working lives. We lose this cash by committing the 3 sins of money management:

  1. Having too much money sitting in a deposit account, earning next to no interest
  2. Using a credit card that doesn’t maximize the returns on our spend
  3. Not dollar-cost averaging our investments

So, Unifimoney aims to bring simplicity and automation to money management. Rather than needing several apps and products, Unifimoney offers a bundle of tools that all work seamlessly together: a high-yield checking account, an HSA, self-directed and robo-advisor investing, a crypto exchange, and a credit card.

They even offer home loans and insurance, student loan refinancing, car insurance, and 24/7 access to buy or sell precious metals.

Unifimoney Logo

Earn up to $5000

for opening an Unifimoney High Yield Checking or Investing account
Available nationwide

Learn how

NorthOne: For the Business Owner

NorthOne is a New York-based FinTech company that provides digital business banking services to small business owners, freelancers, and startups.

NorthOne was founded in 2016, and its mission is to make the financial system more inclusive by rebalancing the economy from the bottom up.

While most business accounts from the big-brand banks have transaction limits that force you to upgrade to premium accounts as your company grows (read: higher monthly fees), NorthOne charges a flat $10 per month and then no additional fees for ACH payments, deposits, transfers, purchases, or app integrations.

Additionally, you’ll have free access to an unlimited number of sub-accounts (called Envelopes), letting you bucket savings for taxes, payroll, or anything else.

With a user-friendly mobile app, transparent pricing, and tech-driven banking tools, NorthOne serves up a fresh take on business bank accounts.

Monzo: For the Overspender

Monzo is a UK-based neobank that is currently launching in the US. Their waiting list is already open, allowing those who want to join this bank to call first dibs.

There isn’t much information on the US site except that accounts are insured by the FDIC up to $250,000, and that fee-free withdrawals count some 38,000 ATMs. Insurance is offered through Sutton Bank.

However, in the UK, Monzo offers overdrafts of up to £1,000, which equates to about $1,400 and change. You can set up budgets for each spending category and get alerts should you start burning through your budget too fast.

There is no reason why Monzo wouldn’t offer the same to US customers.

If you’ve spent too much money and would like to start setting some aside, you can use Pots, acting as a separate savings account.

There are no monthly fees and no minimum balances to maintain, while currency exchanges come with no markups.

Oxygen: For the Hustler

Oxygen has two accounts to choose from – one is for the free thinkers, the others for pioneers. Their free-thinkers account is for individuals, while the pioneers account targets business users.

The free-thinkers account comes with no monthly fees, no minimum balance requirements, nor overdraft fees. You also earn cashback whenever you make purchases from any of the approved merchants, while paychecks arrive up to 2 days earlier.

You can also flag certain expenses such as rent or a business lunch, take a picture of the receipt and attach it. This feature is excellent to help you keep tabs on your accounts.

One other important feature that Oxygen has is the ability to deposit cash – something many neobanks lack. You can deposit money using any GreenDoty location, conveniently located at CVS, Walgreens, and Walmart.

Bella: For the Shopper

Bella is a neobank designed with the conscious shopper in mind.

Whenever you shop with your Bella debit card, you may receive a random reward of up to 200% cashback on your purchase. They do this by lowering their marketing budget and spending the extra money on customer cash back instead.

But there’s another element to Bella surprises: you can choose a destination for that cash back.

You can keep it for yourself by having it deposited to your checking account, have it put into a Karma account to randomly surprise other Bella members, or have it donated to community initiatives.

Their checking account features a ton of personalization options, including the ability to add your photos and hashtags. Plus, their cards are made using recycled ocean plastic.

If you’re looking to save money, Bella makes it fun through their Unconventional Saving Rules system. Using this system, you can save money every time something specific happens – be it rain or sunshine.

For example, you could have $5 moved to your savings account every time there’s sun in your hometown.

Savings accounts earn interest rates with an APY of 0.20% and no minimum balance requirements.

Accounts are also insured by the FDIC up to $5,000,000, thanks to their partnership with nbkc bank, which will automatically spread your deposits across a network of FDIC-insured banks.

Lili: For the Freelancer

Lili has a slightly different approach to business banking than most of their competitors, and that’s their single account to seamlessly manage both your business and personal transactions.

In Lili’s perspective, managing two accounts is an unnecessary headache. Instead, freelancers can use their Lili card for every purchase or deposit, and then easily swipe in the app to categorize the transaction as personal or as business.

When it comes time for taxes, Lili makes life easier by letting you automatically push a certain percentage of any income into a “tax bucket” – no April 15 surprise bills here. Plus, the FinTech reduces your tax prep costs by generating yearly or quarterly expense reports, instantly.

There are two tiers: Lili Pro, for $4.99 per month, or Lili Standard, which is free.

The premise is the same for both, but Lili Pro gives you cashback rewards on your debit purchases and 1% on your savings.

The premium account also comes with a built-in invoicing feature, letting you create and send invoices straight from the app, and even accept direct payment for invoices under $1,000.

While we don’t necessarily think it’s a great system for bigger companies, Lili’s approach is awesome for freelancers and weekend warriors looking to simplify their finances.

Other Reviewed Neobanks

Interested in learning about other challenger banks? Click on any of the neobanks below to read our full review.

Bank Bank About Audience Founded
Cheese Bank logo Cheese Bank Cheese bank was designed with Asian-American communities and immigrants in mind, though anyone can open an account. The platform is entirely mobile-based provides easy-to-use banking services to whoever needs them. Personal/Consumer Products 2019
Qube Money logo Qube Money With Qube, you can get proactive. Money management is all about having a plan, and an app like Qube can help you take charge of your personal finances. Business Products 2019
Lance Bank logo Lance Bank Lance Bank is a neobank that offers accounts through its mobile app. It does not offer physical branches or in-person support. Lance partners with Blue Ridge Bank, a member-FDIC institution based in VA. Personal/Consumer ProductsBusiness Products 2018
SoFi Money Account logo SoFi Money Account SoFi Money is an online deposit account that works like a checking account and a savings account rolled into one. Aside from SoFi Money, SoFi also offers several other products and services including a credit card, personal loans, student loans, refinance options including student loan refinancing, and credit score and budgeting. Personal/Consumer ProductsBusiness Products 2011
Atmos Financial logo Atmos Financial Atmos offers an attractive savings rate and modern banking features. So if you’re looking for a bank that both helps the planet and your bank balance, Atmos is worth checking out. Personal/Consumer Products 2020
HMBradley logo HMBradley HMBradley is built around one central premise – to help people save more money. To help savers grow their money, they reward those who save the most with higher interest rates on their balances. Personal/Consumer Products 2019
Douugh logo Douugh Douugh’s money management app is an all-in-one platform that’s equal parts digital bank account and personal financial planner. It is driven by AI tools that help put your finances on autopilot so you can focus on the things that matter most. Personal/Consumer Products 2016
Green Dot Bank logo Green Dot Bank Overall, Green Dot Bank is a safe option for people who don't want or need a traditional bank account. It also might be a great fit for those who can't qualify for one. Personal/Consumer ProductsBusiness Products 1999
Ando Money logo Ando Money While they don't offer things like credit cards, if you value transparency, clean energy, reducing emissions, and want your bank to fight climate change, then Ando Spending Account is worth considering. Personal/Consumer Products 2021
GoBank logo GoBank If you have been having issues getting a bank account, GoBank might very well be just the solution for you. While it’s not perfect, nothing ever really is, it can be a great way to get started and access banking services without many frills. Personal/Consumer Products 2013
Unifimoney logo Unifimoney Unifimoney's high-yield checking account and premium credit card both have tons of potential. But for now, they're still in beta and positioned as an option for high earners, both of which limit its reach. Personal/Consumer Products 2019
MoneyLion logo MoneyLion MoneyLion provides a fresh look at what banking is evolving to in the 21st century. With intuitive personal finance tools, fully digital banking features, and an all-in-one approach, MoneyLion is an interesting mobile platform to consider. Personal/Consumer Products 2014
M1 Finance logo M1 Finance At its best, M1 plays the role of a financial advisor, lender, and banker all at once. The accounts work together seamlessly, and you can watch your money grow with automated asset allocation, low-rate loans, and a high-yield bank account. Personal/Consumer Products 2015
Wealthfront Cash Account logo Wealthfront Cash Account The Wealthfront cash account comes with standard checking features like a debit card, direct deposit, and bill pay. You can easily make deposits and withdrawals and move money between your Cash Account and your Wealthfront investment account. Personal/Consumer Products 2011
Varo Bank logo Varo Bank Varo is one of the biggest neobanks out there and comes with a lot of features that people like. With low fees, high APYs, and solid customer service, Varo definitely qualifies as a good option for banking. Personal/Consumer Products 2015
Mercury Bank logo Mercury Bank Mercury Bank provides a user-friendly, tech-forward banking platform, catering to entrepreneurs looking to take their business to the next level. With digital tools, customizable interfaces, and no fees to worry about, Mercury takes a modern approach to the traditional world of business banking. Business Products 2017
Hatch logo Hatch Hatch has a lot to like, and its flexible, low-fee structure is sure to be appealing to many startup independent contractors alike. At only $10 per month and great cashback rewards available, Hatch Business checking is worth checking out. Business Products 2018
Revolut logo Revolut Revolut is unique as a British bank trying to make its mark in the US. Its platform is positioned as a truly global option, so whether you're personally spending or your business needs to spend in Euros, GBP, or USD, you'll be set. Personal/Consumer Products 2015
Level Bank logo Level Bank Level Bank is a legit, mobile-only neobank. Its accounts are backed by Tennessee-based Evolve Bank & Trust, which is a federally chartered financial institution. They offer a competitive APY on their banking account and up to 1.5% cashback on debit card purchases. Personal/Consumer Products 2016
OnJuno logo OnJuno If you're looking for an easy-to-use digital banking solution, OnJuno is an attractive option. OnJuno sets itself apart is with its earning potential through its high-yield account options. Personal/Consumer Products 2019
Monzo logo Monzo Along with other online banks like Starling and Revolut, Monzo is extremely popular in the UK, where it emerged as a challenger bank to the High Street banks and has grown its customer base to more than 5 million users in just six years. Its mobile app and customer service are well regarded, but whether or not its success and functionality will translate to the US market remains to be seen. Personal/Consumer ProductsBusiness Products 2015
NorthOne Bank logo NorthOne Bank With a user-friendly mobile app, transparent pricing, and tech-driven banking tools, NorthOne serves up a fresh take on business bank accounts. Business Products 2016
Lili Bank logo Lili Bank Overall, Lili is an interesting option for up-and-coming freelancers and independent contractors. There's a lot to like in the lack of fees, mobile functionality, and its lean, easy-to-use platform. Business Products 2018
One Finance logo One Finance With the intuitive budgeting tools, no fees to worry about, and high-end interest rates, there’s a lot to like about One Finance. Personal/Consumer Products 2019
BlueVine Bank logo BlueVine Bank Between strong online functionality, quick access to cash when you need it, and a built-in payment platform, there's a lot to like about BlueVine Banks business checking and loan options. Business Products 2013
Current Bank logo Current Bank Current Bank offers free and paid mobile-only checking accounts. They operate on the premise that banking should be accessible and affordable for everyone. Personal/Consumer Products 2015
Novo Bank logo Novo Bank Overall, while Novo's product offerings are as lean as it gets, there's a lot to like in this comprehensive business checking account. In fact, it ranked among the best business checking accounts in 2020 by Money Magazine. Business Products 2016
Aspiration Bank logo Aspiration Bank Aspiration Bank has a slick online platform, and cash back earning options that can compete with any leading bank out there. Personal/Consumer ProductsBusiness Products 2013
Chime Bank logo Chime Bank Chime is a player in the FinTech space, with an intuitive mobile app, no maintenance, hidden or foreign transaction fees, and built-in features to help you save like their "save when you spend" and "save when you get paid" automatic transfers. They don't offer a lot of account options, but if their spend and savings accounts meet your needs, we recommend them. You'll find a competitive rate and a top-notch digital experience (as you'd expect!). Personal/Consumer Products 2014

Pros & Cons

While Neobanks have many advantages over traditional banks, there are disadvantages (just like everything else in life).

Understanding what these pros and cons are can help you decide if this kind of bank is for you.


  • Truly leverage the latest technology. Since neobanks are fintech companies, they truly leverage the latest technologies to make the banking experience the best it can ever be.
  • Have low costs. With no branches and none of the red tape usually associated with traditional banks, neobanks can offer products and services at a much lower cost.
  • Can be very efficient. By truly understanding technology and having much fewer overhangs, these banks can offer a very efficient banking experience with fewer issues and waiting times.


  • No physical branches. Not having any physical branches allows neobanks to lower their prices. However, it can also be a con should you find yourself in difficulties as you’re limited to email, chat, and in some cases – phone.
  • Limited products. Neobanks are relatively new to the market. As such, they have not had the time to develop the entire range of products and services you’ll find at traditional banks.
  • They’re a new breed. Traditional banks have been around for many years, which increases trust (even if we have seen centuries-old banks fail). However, neobanks can be something of an unchartered territory that may lead to apprehension by potential customers.

FinTech Bonus Offers and Promotions

If you’re opening a new account with a neobank, be sure to check if they’re offering a sign-up bonus to new customers. For example, check out these promo offers from popular fintechs:

Aspiration LogoAspiration Aspiration Plus $200 Limited Time
  • Card Spend
NorthOne LogoNorthOne Business Banking $10 April 22, 2022
Chime Bank LogoChime Spending Account $290 November 30, 2021
  • Direct Deposit
Monifi LogoMonifi Monifi Spend $250 November 30, 2021
  • Direct Deposit
Unifimoney LogoUnifimoney High Yield Checking or Investing $5000 Limited Time
  • Minimum Balance
Kabbage LogoKabbage Kabbage Checking™ $300 December 15, 2021
  • Card Spend
Spiral Financial LogoSpiral Spiral Checking $200 December 31, 2021
  • Direct Deposit
Current LogoCurrent Premium Checking [SwagBucks] $120 Limited Time
  • Direct Deposit
SoFi LogoSoFi Sofi Money $100 December 31, 2021
  • Direct Deposit
Lili LogoLili Lili Account $100 Limited Time
  • Card Spend
  • Referral
see all bonuses

Neobank FAQs

What is the meaning of neobank?

Neobanks are a special breed of online banks challenging the traditional banking establishment.

They offer innovative financial products and services that appeal to tech-savvy consumers with snazzy apps and easy banking without formalities.

Is Monzo a neobank?

Yes, Monzo is a neobank currently working on launching its products and services to the US market. In the UK, they offer overdrafts that go as high as $1,400, free foreign currency exchange, and different budgeting tools and alerts to help you stay within budget without overspending.

How do neobanks earn money?

As financial institutions, neobanks earn money in different ways. Some neobanks offer premium paid accounts with extra services and perks that might make sense to some of their customers.

Others might offer additional services at a cost for which you might have to pay a fee. They can also invest the deposits like traditional banks, giving them other revenue streams to sustain their business models.

Are neobanks safe?

Neobanking is relatively safe since the challenger banks still have to abide by the regulators of the jurisdiction in which they operate.

Neobanks can also have banking licenses, which makes them as safe as any other bank. In most cases, you’ll also find extended FDIC insurance so that your money is as safe as it can ever be.

Is a Neobank Best for You?

While neobanks are a relatively new concept, they are quickly proving themselves to be a favorite among customers.

While the UK and EU have traditionally been pioneers in this regard – giving us neobanks like Starling, Revolut, and Monzo – the US is also seen a surge of these banks.

Unsurprisingly, San Fransico and New York are the hotbeds for these technology-based banks.

A lot remains to be seen when it comes to this new breed of banks. After all, traditional banks have faced crises before. As a result of them, they’ve built robust systems over many, many years to withstand the most serious of challenges.

We must also recognize that we live in unprecedented times. Never before in history have we had access to as much information as we do today.

With challenger banks giving more control to their users, those who grew up with ubiquitous access to the internet and apps for just about anything will definitely appreciate what neobanks offer.

The Aspiration Spend & Save Accounts are cash management accounts offered through Aspiration Financial, LLC, a registered broker-dealer, Member FINRA/SIPC, and a subsidiary of Aspiration Partners, Inc. (“Aspiration”). Appreciation is under separate ownership from any other named entity. Aspiration is not a bank.