Written by
Heather Taylor
Edited by
Lindsey Kloosterman
Neobanks are steadily growing in popularity among tech-savvy consumers as a banking option. Also known as challenger banks, neobanks are tech firms that offer online-only financial services and transactions through online and mobile banking.
Those who choose to bank with a neobank will receive many of the same financial products and services as traditional banking institutions and the added benefit of lower fees and higher interest rates due to the lower overhead costs of online banks.
To determine the Best Neobanks of 2024, GOBankingRates ranked leaders in the category based on many factors, including:
- Monthly fees
- Minimum balance needed in account to earn APY
- Savings APY
- Products and services offered
- Mobile app ratings
- Extra benefits and perks
Here are GOBankingRates’ Best Neobanks of 2024.
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GOBankingRates Best Neobanks
Best for SAVINGS TOOLS
Acorns
Products Offered
Checking, savings, investing
Savings APY
5.00%
Monthly Fee
$3-$9
WHY WE LIKE ACORNS
Acorns covers many of your financial needs and makes the nickel-and-dime tasks seem more approachable. This neobank has a variety of savings products and tools all of which are designed to not only help you store your spare change but also invest it. You can even get cash-back rewards at select retailers.
The management fees for small accounts can be on the expensive side, however, the automatic round-ups of Acorns makes saving and investing so easy it can be worth it. In today’s economy, where and how you save is important, and with Acorns you can really make every penny count.
Best for INVESTING
Betterment
Products Offered
Checking, savings, investing
Savings APY
Monthly Fee
$0
WHY WE LIKE BETTERMENT
Betterment provides all the tools you need to start your investing journey, especially if you are starting to make big investments. Betterment’s robo-advisor guides you through picking an investment portfolio for each of your goals. If you don’t know exactly what to invest in, its algorithms can help match you to a diversified portfolio based on your goals and risk tolerance.
It also helps that Betterment’s Cash Reserve Account ranked as one of GOBankingRates’ Best High-Yield Savings Accounts of 2024 with a competitive APY and no fees or minimums.
Best for MOBILE APP
Chime
Products Offered
Checking, savings, secured credit card3
Savings APY2
Monthly Fee
$0
WHY WE LIKE CHIME
Holding the twofold distinction of being ranked as one of GOBankingRates’ Best Neobanks in 2024 and the No. 1 most-loved banking app, Chime is all about delivering a smarter way to bank.
Some of the benefits of banking with Chime include no monthly fees, strong Annual Percentage Yields (APYs) to grow your money fast and secure and interest-free credit cards to help you build credit. This neobank also takes the security of your money seriously and is FDIC-insured to protect your funds so you can focus on building your wealth.
Best for CASH-BACK REWARDS
Current
Products Offered
Savings, crypto trading
Savings APY
Monthly Fee
$0
WHY WE LIKE CURRENT
There’s now a seemingly endless crop of neobanks popping up, but Current distinguishes itself with its unique product offerings. For starters, it offers a crypto trading platform, which many other neobanks do not. Its checking product also stands out. Perks include no overdraft fees and accessing your paycheck up to two days early when you sign up for direct deposit. Current also makes it easy to earn cash back — you can earn up to 7x the points on purchases at thousands of participating merchants, which can be redeemed for cash back.
While Current is designed for those looking to build credit — and it’s a great option for that — you don’t need to be in credit-building mode to make use of the various offerings provided by this mobile-only bank option.
Best for CASH BONUSES
Dave
Products Offered
Checking, savings
Savings APY
Monthly Fee
$0
WHY WE LIKE DAVE
Yes, Dave offers your typical checking and savings accounts, but this neobank also helps you get money to put in these accounts and keep whatever money you do have safe. As soon as you open a Dave Spending account (their version of a checking account), you’ll get an ExtraCash advance bonus. You can also earn money by answering questions through Dave’s Surveys feature. Plus, you can get paid up to two days early, which can help you avoid overdraft fees. And, when you make purchases with the Dave Debit Mastercard, you’ll earn up to 15% cash back.
Meanwhile, Dave’s Goals account offers a pretty high APY. Although not the highest in the neobanks category, it’s still much higher than you would get at a traditional bank. Overall, Dave is a great option if you want access to an appealing sign-up bonus and built-in ways to earn money.
Best for COMPETITIVE RATES
GO2bank
Products Offered
Savings, secured credit card
Savings APY
Monthly Fee
$5
WHY WE LIKE GO2BANK
There are many reasons why GO2bank receives top honors as one of GOBankingRates’ Best Neobanks of 2024. Described as the ultimate mobile bank, GO2bank is the simple and smart way to bank.
Those who bank with GO2bank enjoy the benefit of earning significantly more than the national savings rate average when they open a high-yield savings account and up to $200 in overdraft protection to back up your balance. Your money, and account information, is also always kept safe as GO2bank is Member FDIC, provides fraud alerts via text message and includes an easy card lock/unlock feature on every chip-enabled card.
Best for HIGH APY
One Finance
Products Offered
Checking, savings
Savings APY
Monthly Fee
$0
WHY WE LIKE ONE FINANCE
One Finance almost acts like a credit card rewards program, with cash back earned on purchases of certain brands, round-ups where you save change on your purchases and the ability to get your paycheck two days early.
Consumers will approve of the high APY for eligible deposits, the lack of fees and minimum daily account balances and access to more than 55,000 ATMs. And, a special feature called ‘Pockets’ that lets you create a checking and savings account in one.
Best for FOREIGN TRANSACTIONS
Revolut
Products Offered
Savings, investing, foreign exchange, money transfers
Savings APY
Monthly Fee
$0
WHY WE LIKE REVOLUT
Revolut is an excellent choice for people who want the ability to bank, crypto and stock trade on the same platform. With three checking and savings account plans plus free crypto trading and the ability to buy and trade stocks through the app, it’s quite versatile. It also offers low-cost foreign exchange that works with 28 different currencies.
Revolut does things a little different than traditional checking and savings accounts, offering plans that include savings accounts but allow you to transfer funds like you would with a checking account. Plan holders can earn a decent APY on their savings funds.
Best for INTEREST RATE
Varo
Products Offered
Checking, savings, secured credit card
Savings APY
Monthly Fee
$0
WHY WE LIKE VARO
As neobanks gain popularity, the competition heats up. Varo won in this category in part because of its no fees and competitive interest rates.
The bank impressed us with its measures to serve the unbanked and underbanked populations. It may be the best online solution for those who can’t open a traditional checking account. The secured credit card, Varo Believe, is backed by your Varo Bank Account balance. The card has no fees, no interest charges and no hard credit check required to open an account.
Varo also offers a cash advance of up to $500 for Varo Bank Account holders. Overall, the high interest rates combined with the convenience and a broad-based network of 55,000 fee-free ATMs makes Varo a top pick.
Best for INVESTING AND SAVINGS MIX
Wealthfront
Products Offered
Checking, savings, investing, retirement, loans
Savings APY
Monthly Fee
$0
WHY WE LIKE WEALTHFRONT
With no monthly fees and no minimum deposit, Wealthfront earns the title as one of GOBankingRates’ Best Neobanks of 2024. The straightforward Cash Account delivers an extremely high APY with no limit to the withdrawals you can make monthly.
But Wealthfront really stands out as an investment solution for those who want simplified savings plus hands-free investing all on one platform. Wealthfront offers individual stock accounts, bonds and automated investing, which you won’t find with many other neobanks.
We love Wealthfront for its unique robo-advisors, which help you choose the best stocks, index funds and bonds to meet your financial goals. Funds are also FDIC-insured up to $8 million, which is well above the $250,000 most banks guarantee.
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Research Methodology
Neobanks are fintech firms that offer apps, software and other technologies to streamline mobile and online banking. These fintechs generally specialize in a particular financial product(s), like checking and savings accounts. To determine rankings GOBankingRates looked at the following factors: (1) monthly checking fee ratio (percent the minimum to avoid fee compared to the monthly fee itself); (2) minimum needed to earn APY; (3) savings APY; (4) products/services offered (credit cards and investment services); (5) the average mobile app rating between the android and apple stores; and (6) number of extra benefits and perks unique to neobanks. All factors were then scored and combined, with the lowest score being the best. Factors (1) and (2) weighed 0.5 times, factors (3) and (6) weighed 2 times. All data is up to date as of Nov. 8, 2023; rates and fees are subject to change.
What To Know About Neobanks
A neobank is a tech firm that offers online-only financial services through mobile and online banking. Nearly all financial transactions can be performed online with a neobank, including transferring money, paying bills and depositing mobile checks. A neobank does not have a brick-and-mortar presence or physical branches.
What Are Neobanks?
The difference between a traditional bank and a neobank is a neobank does not have a brick-and-mortar presence or any physical branches. Essentially, it is a tech company or fintech firm that provides banking services via a website or mobile app. Neobanks are often also referred to as challenger banks.
Who Is a Neobank Best For?
A neobank account is best for those who are tech-savvy and comfortable in an online banking environment. If you have many complex banking needs or an influx of cash, neobanks may not be the best fit for you.
Neobanks vs. Traditional Banks
Neobanks, unlike traditional banks, have no physical branches. However, this can limit the services neobanks can offer, because they save on so much overhead and operational costs, allowing them to offer more affordable options and fees for their customer base. Neobanks are online only which gives them a flexible virtual presence and an instant account confirmation process.
Neobanks vs. Online Banks
While neobanks do offer online banking services, this does not qualify them to be online banks. Online banks have FDIC insurance. Neobanks do not. If you wish to bank with a neobank, it is recommended you make sure the neobank is recognized by the FDIC or is partnered with an FDIC-insured bank.
Pros and Cons of Neobanks
While neobanks are a bit limited in their services, some pros and cons come with using this form of banking.
Pros
There are several advantages of neobanks to be considered, such as the following:
- Ease of access: You can access your funds easily through a neobank’s mobile app or website.
- Ease to set up: Setting up an account with a neobank is much less time-consuming than it is with a traditional bank. Some neobanks, depending on the financial institution, do not conduct credit checks. This gives your account a higher chance of approval and may make it easier to set up your account.
- Competitive rates: Unlike traditional banks, neobanks do not have branch locations. Due to not having to pay for physical premises, their cost of operations is low. This gives neobanks the chance to offer competitive rates and better interest rates to banking customers.
Cons
There are many disadvantages of neobanks to be considered, such as the following:
- No physical branches: Not having a branch or in-person banking option can limit some service options.
- Less regulated: Neobanks may not be chartered or licensed, which could cause issues if the fintech goes bankrupt.
- Complex transactions: As there is no in-person support, complex banking transactions can be problematic with neobanks.
How To Choose a Neobank
Neobanks are online replicas of traditional banks and credit unions. Convenience is one of the greatest benefits of a neobank, as customers may set up their accounts within minutes and begin financial transactions.
Some of the most popular services available from neobanks include mobile money transfers, online check deposit and checking and savings account services. Once you know what features are most important to your finances, you can choose the best neobank account for you.
Caitlyn Moorhead contributed to the reporting for this article.
Recap of Winners
- Acorns – Best for Savings Tools
- Betterment – Best for Investing
- Chime – Best for Mobile App
- Current – Best for Cash-Back Rewards
- Dave – Best for Cash Bonuses
- GO2bank – Best for Competitive Rates
- One Finance – Best for High APY
- Revolut – Best for Foreign Transactions
- Varo – Best for Interest Rate
- Wealthfront – Best for Investing and Savings Mix
FAQ
Although the basic idea behind a neobank can be simple to understand, many common questions still surround them. Here are the answers to some of the most frequently asked questions regarding neobanks and what this type of bank offers.- Is a neobank a fintech?
- Best described as a niche fintech, a neobank helps bridge the gap between traditional banks and customers by offering digital banking alternatives. A neobank may operate solely through digital means, but it can accomplish most financial transactions like that of a physical bank branch.
- Are neobanks safe?
- As most neobanks are FDIC-insured, they are considered to be as safe as traditional banks. This means that all accounts are covered and protected typically up to $250,000. If they are not insured through their own charter, they will generally do so by working through a larger bank.
- Is PayPal a neobank?
- No, PayPal is not considered a bank or neobank, as it does not offer traditional banking account needs, nor is it FDIC-insured. It is considered a payment platform.
- Is Venmo a neobank?
- No, Venmo is not FDIC-insured and is not considered a bank or neobank, as it does not offer traditional banking customer services, such as high-yield savings accounts or ATM withdrawals. It is considered to be a payment platform.
- What is the difference between digital banks and neobanks?
- While neobanks operate solely online, digital banks are essentially just an online alternative to traditional banking.
See Best Banks Winners From All Categories
*Chime is a financial technology company, not a bank. Banking services provided by, and debit card issued by, The Bancorp Bank, N.A. or Stride Bank, N.A.
1Chime SpotMe is an optional service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each at least once every 34 days. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member’s Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime’s discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won’t cover non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. See Terms and Conditions.
2The Annual Percentage Yield (“APY”) for the Chime Savings Account is variable and may change at any time. The disclosed APY is effective as of September 20, 2023. No minimum balance required. Must have $0.01 in savings to earn interest.
3Out-of-network ATM withdrawal and over the counter advance fees may apply. See here for details.
4Out-of-network ATM withdrawal and over the counter advance fees may apply. See here for details.
