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Banking looks very different today than it did 30 years ago. Gone are the days of making daily cash withdrawals, cashing in cheques, or even visiting the bank at all.
While many customers continue to conduct at least some of their business at brick-and-mortar banks, banking is turning increasingly digital. A 2023 study by Accenture found that just under half of them have gone online or digital only. And this trend is only expected to grow.
With mobile apps and online banking platforms offering easy access to accounts and services, physical branches are losing their influence in the banking world.
At the forefront of this shift are several leading online and digital banks whose incredible user experience is making it easier than ever before for people to manage their money remotely.
What are digital banks?
Digital banks are financial services companies that operate exclusively online. They offer many of the same services as physical banks but through a mobile app or website.
Digital banks typically don't have any physical branches. Instead, they put all of their resources into mobile banking, offering user-friendly mobile apps that allow customers to manage their accounts, transfer money, and invest directly through the bank’s app.
Digital banks operate through a network of servers and databases that store customer information and transaction data. Customers access their accounts and manage their finances through the bank's website or mobile app.
Some digital banks also allow you to submit applications for loans and credit cards directly through the bank's app or website. Others even offer investment services, such as the ability to buy and sell stocks, bonds, and mutual funds, and budgeting tools to help you plan your finances.
Benefits of Digital Banking
One of the main benefits of digital banks is that they’re much more convenient than physical banks since you can access your bank whenever and wherever you want as long as you have access to the Internet.
This means you can transfer money, check balances, and manage your accounts anywhere in the world without the constraints of traditional banking hours.
Since digital banks operate without physical branches, they also avoid much of the costs associated with maintaining a branch network. This allows them to pass on the cost savings to customers in the form of lower fees, higher interest rates on savings accounts, or other competitive features.
It’s also important to note that digital banks often offer a better user experience than traditional banks. Opening an account is often extremely simple, and you don’t need to fill in any paperwork, sign any documents or even leave the comfort of your own home.
Things to consider before using a digital bank
While digital banks offer numerous benefits, it's important to consider that digital-only banks lack many of the banking services you may rely on.
For one, digital banks often have little to no ATM networks, so you may need to use ATMs from other banks which may incur additional charges. They also have no or very few physical branches, so if are looking for in-personal financial advice, they may not be the best option for you.
Digital Banks don’t offer the full suite of financial services you may need. If you have diverse banking needs or require specialized services, an online bank may not be the most suitable option.
Choosing a digital bank
Choosing the best digital bank for your needs can be tricky, but with the right approach, you can find one that perfectly aligns with what you’re looking for.
Here's a breakdown of key factors to consider:
- Fees and charges – Compare monthly account fees, ATM fees, and foreign transaction fees. Some banks offer fee-free accounts with certain conditions.
- Interest rates – Check for competitive interest rates on checking and savings accounts, especially on high-yield savings options.
- Mobile app and online banking experience – Evaluate the user interface and functionality of the app and online platform. Ensure it's intuitive and convenient for your daily banking needs.
- Customer service – Research customer service options and reviews to see how readily available and helpful they are.
- Security and FDIC insurance – Ensure the bank uses robust security measures for your data and transactions, and verify if it's FDIC-insured to protect your deposits.
Best Digital Banks
There are a range of different digital banks on the market each with its own account types, price points, and set of features to help you track spending and make the most out of your hard-earned cash.
In this list, we’re counting down ten of the best digital banks available today, exploring the features and benefits that make them so popular.
Founded in 2013 with the mission of reinventing financial services, Nubank has become one of the world’s largest banking platforms in the world – serving 90 million customers across Brazil, Mexico and Colombia. As one of the leading technology companies in South America, Nu leverages technologies and innovative business practices to create new banking solutions and experiences for individuals and SMEs that are simple, intuitive, convenient, low-cost, empowering, and human. The company's products include a digital account known as NuConta, an international credit card, both without fees, personal loans, life insurance and investments. It also offers a credit card you can control directly through a mobile app. The app allows its users to track transactions in real time, block their respective credit cards, apply for a limit raise and contact customer support.
With Nubank, everything is managed through a mobile app, allowing you to track spending, pay bills, apply for loans, and more. By operating entirely digitally, the company an offer financial products and services at potentially lower costs, making them more accessible to a wider range of people. Fees are also clearly displayed and often absent, making costs predictable and potentially lower than traditional banks.
Quotinic is a digital bank headquartered in New York City that uses technology and online services to reimagine traditional banking for people across the US. The only all-digital Community Development Financial Institution (CDFI) bank in the United States, it provides adaptive lending and innovative deposit products that go far beyond traditional banking inequities to prove there is a better and more equitable way to put the customer first. The bank focuses on truly understanding and serving the underdogs, entrepreneurs, immigrants, and more with a curated banking experience for every customer rather than a one-size-fits-all banking and mortgage lending approach.
Rated the best online bank for low fees and high APY in 2024 by Forbes, Quotinic aims to revolutionise traditional banking by offering new solutions to make banking easier and more equitable for all. It was also the first US bank to US bank to offer Bitcoin Rewards Checking, and in 2022 became the first US bank to offer a Pay Ring contactless payment device for its checking accounts and was the first bank to open an outpost in the Metaverse.
Committed to offering all-inclusive banking to people from all backgrounds, Varo makes finances more approachable for the masses. The completely digital banking company requires no credit check when you want to sign up, and there’s no minimum balance you have to stick to. If you want a basic checking account, you won’t have any monthly fees either, and you can access your money at over 55,000 Allpoint ATMs nationwide without incurring fees.
Varo offers a 5.00% APY on up to $5,000 in your savings account, significantly higher than the national average. When you sign up for your account, you’ll get comprehensive access to an easy-to-use app where you can track any of your money services in one place. Leverage features like round-up savings, expense categorization, and spending insights to manage your finances effectively. You can also get an overdraft with no fees when you need extra help.
Combining convenience with low fees, NBKC Bank prides itself on making online banking what it should be: simple, transparent and efficient. The Bank is geared toward people who prefer to bank digitally, offering a variety of digital services to make the banking experience as seamless as possible for its customers across the US. Its "Everything Account" boasts no monthly fees and earns a 1.75% APY interest rate which is significantly higher than the national average for checking accounts. There are also no overdraft fees to save you money from accidental overdrafts and all customers get free access to over 37,000 MoneyPass ATMs across the country. NBKC will even reimburse up to $12 a month if you use an out-of-network ATM and the provider charges a fee.
NBKC makes it easy to manage your finances on the go with the user-friendly app, allowing for transactions, bill pay, and budgeting tools. The Everything Account also comes with a host of built-in digital tools for tracking expenses and setting spending goals to help you track costs and stay on top of spending.
Chime is a leading digital bank founded on the goal of making financial peace of mind a reality for everyone, It is one of the fastest-growing fintech companies in the US, offering banking offering banking services that are helpful free and easy to use. Chime partners with regional banks to design member-first financial products, creating a more competitive market with better, lower-cost options for everyday Americans. The company offers access to bank accounts with fee-free overdrafts, provides members the chance to receive early access to their paychecks, helps them improve their credit, and more. Chime also doesn't require a minimum balance, making it accessible to people of all income levels.
Chime's app is known for its intuitive design and ease of use, allowing you to manage your finances, transfer money, track spending, and set savings goals on the go. With qualifying direct deposits, you can receive your paycheck up to two days early, potentially providing quicker access to your funds. Chime also offers features like Round Ups and "Save When You Spend" to automatically transfer small amounts to your savings account with each purchase, helping you build savings effortlessly.
Built around the convenience of an easy-to-use smartphone app, Revolut makes sure anyone can get the banking experience of their dreams. The Revolut system makes it easy to track all your money in one place, with extra tools for budgeting built-in, so you can achieve your goals. You can also make payments in seconds across over thirty countries, meaning you never run into issues when transferring funds to your friends and loved ones.
From within your Revolut banking app, you’ll be able to set up Google and Apple Pay, access information about your PIN, update security and adjust settings. There’s also no need to worry about excess fees when you need to access your cash while travelling.
Another one of the best online bank accounts on the market today, Discover’s online banking makes it easy to manage your money on your terms. You can open retirement accounts, money market tracking accounts, online saving accounts, and checking accounts in no time. There’s even a guide to help you find which account type is right for you. The Discover Network also provides card acceptance at millions of businesses and cash access locations. It operates the ATM debit network, PULSE and Diners Club International has acceptance in more than 185 countries and territories.
Discover combines a simple and accessible mobile app with extra features like 1% cashback on your debit card purchases, and a fantastic 0.40% APY rate, so you can watch your money grow gradually over time. The company’s app and website are known for their intuitive design and ease of use, allowing you to manage your finances, track spending, and access customer support with minimal hassle. The app includes various features to help you manage your finances efficiently, including budgeting tools, personalized financial insights, and bill pay reminders. There are no minimum bank requirements or hidden fees either.
A name many people associate with the transformation of online banking, Starling Bank is a digital-only company offering innovative saving and financial management. You can open a personal or business account on your phone in a matter of seconds and start managing your money in no time. The simple and well-designed app is easy to use and great for getting a better look at your financial situation. It's known for its intuitive interface and smooth navigation, making it easy to manage your finances on the go. You can even get payment alerts, and spending insights sent straight to your phone.
With Starling, you instant alerts for every transaction, allowing you to stay on top of your spending and budget effectively. Features like "Round Ups" and "Goals" help you save effortlessly by rounding up purchases or setting specific saving targets, while the “Spaces” feature allows you to create virtual "pots" for specific spending goals or bills, helping you manage your finances proactively. There’s even a Kite app for kids designed to help younger users manage their pocket money,
Trusted by over 7.5 million people across the UK and beyond, Monzo is one of the best-known names in digital marketing and a popular choice for consumers looking to manage their finances digitally. You can spend, save, and manage your money all within an easy-to-use app on your smartphone, making it easy to track spending, set budgets, and manage your finances on the go. Transactions are automatically categorized for you too to give you insights into your spending habits and where your money goes, and you can set customized budgets for different categories and track your progress throughout the month.
Monzo is one of the best digital banks for creating specific financial goals and tracking your progress towards achieving them. Most Monzo accounts, including the standard account, also come with no monthly fees, allowing you to access a host of premium banking features at no additional cost. You can also find ATMs within your area right from the app and withdraw cash for free at any ATM within the UK using the Monzo card.
Voted one of the best online banks in the world by Forbes for the third year in a row, N26 is a digital bank that makes it easy to manage your cash on the move. The N26 app is purpose-built for online banking, allowing you to track your expenses, improve your budgeting strategy, and even set cash aside for your savings. You can manage everything from account opening to transactions and customer support through the app, and it gives you instant alerts for every transaction to help you stay on top of your spending and budget effectively. The app also offers features like Spaces for organizing your money, "Round-ups" for automatic savings, and instant transfers to other N26 accounts.
One of the biggest benefits of N26 is its dedication to security. The solution operates with a comprehensive European banking license and protection for up to 100,000 euros. It also has features like multi-factor authentication, fingerprint login, and FDIC insurance built-in for US customers, so you can rest assured that your funds are safe. Despite these security features, getting started isn’t complicated. You can open an account in minutes and spend even before your card arrives. N26 also operates in over 30 markets, making it a good option for those who travel frequently or have international financial needs.
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