Are Neobanks The One?

Banks are trying everything lately to get your money. One of them even has a café, which looks like the stupidest thing on the planet. Seriously, who thought that was a good idea? However, a newer, cutting-edge concept has been gaining traction: the neobank. No, they’re not digital animals that live on a keychain. They’re something else entirely.

Here’s Five Fast Facts About Neobanks:

‍

1. 🏦 Say What? - A neobank is a financial tech firm (or fintech) that partners with a bank to create an online-only bank.
2. 📱 But Why? - To put it simple: there are lower fees and competitive rates. Plus, you’re probably on your phone non-stop anyway so it can be a sensible choice for a certain demographic.  
3. 📉 How New?-  Since the financial downturn in the mid 00s. In fact, you’ve probably seen ads for Chime as of late. They’re one of the most popular and successful neobanks.
4. 💰 What about FDIC? - Like any good bank, they’re FDIC insured, so your money is safe. The catch is that they don’t have a physical office, so if something were to happen, it would be a hassle to get things squared away.
5. 🤷 What’s the Catch? - No branch offices means limited customer service and few (if any) people who can help in an emergency. They also offer fewer account services and most importantly, they’re mostly startups and startups are known to fail.

‍

🔥Bottom line: Like most new tech, neobanks can be a gamble. They’re certainly an option for people on the go who don’t have a need for physical banking. They really could be the wave of the future. And Chime’s success certainly suggests that.

‍

Would you open an account with a neobank?

‍

Let us know by connecting with us on Facebook and Instagram! Also, remember to share this newsletter with your friends & coworkers!

‍

Btw, If you’ve read this far and haven’t yet signed up for the weekly Paycheckology newsletter, CLICK HERE!

‍