USA Digital Banks

chime bank card
5.0
5/5
n26
n26 card
5.0
5/5
northone
5.0
5/5
moneylion
moneylion card
5.0
5/5
simple bank
5.0
5/5
transferwise
transferwise card
5.0
5/5
ally bank
ally bank card
5.0
5/5
curret bank
current bank card
5.0
5/5
varomoney
5.0
5/5
marcus bank
5.0
5/5
gohenry
gohenry card
5.0
5/5
cogni digital banking
cogni card
5.0
5/5

What is digital banking

Recent years have seen digital banks rise at a rapid rate in Europe. Although US challenger banks have been emerging at a slower rate, there is now a solid group of digital banks that are here to impact how Americans go about their banking. US traditional banks have been dominating personal banking for decades. Still, the new challenger banks offer an alternative that uses cutting-edge innovations in digital technology to provide a more convenient and useful service to the customer. Digital banks provide a service that is entirely digital, accessible through apps or desktop. This means they do not have physical branches. Still, the availability of 24/7, responsive customer service, and countless features to help manage finances and protect security mean that physical branches are not needed for this service type.

What are the benefits of a digital bank

Estimations have shown that the average American household pays around $329 in bank fees every year, and a large portion of these fees charged by traditional financial institutions are hidden. One of US digital banks’ priorities has been to provide a fee-free service based on transparency, with no hidden fees – which should appeal to those households that are unhappy with the charges they receive from their current bank each year. Many digital banks also offer no overdraft charges, which is rare in the traditional financial industry.

Another aspect of the “fee-free” service offered by several digital banks is fee-free transactions and ATM withdrawals abroad, which attract frequent travelers. For a long time, it has been the case that travelers return from their trips abroad to find a long list of charges on their bank statements. Digital banks want to lessen this side of banking to suit modern-day life. The budgeting features and real-time spending updates offered by digital banks are also available. At the same time, you travel, meaning you can stay on top of your finances at any time, anywhere. The instant freeze and unfreeze features available on many of the digital banking apps also provide peace of mind for travelers that if they lose their card, they don’t have to go through the long process of getting in touch with their bank the other side of the world.

One of the most exciting benefits of digital banks is that they are always creating and testing innovations in fintech, and their users get to be the first to try them.

Summary of the USA's digital banks

Many of the US’s digital banks have some surface similarities in the service they offer, with most of them, including ChimeSimple, and SoFi, offering a checking account that comes with a Visa debit card. The other features they offer tend to vary from bank to bank and may help you decide which one best suits your personal financial needs and goals.

Budgeting is a common theme across digital banks, as they aim to help customers make the most of their money and make banking more customer-focused. US-based digital banks each offer their budgeting tools, such as monthly reports, forecasting, spending goals, and alerts that help you stay on track. Simple Bank has zero-sum budgeting integrated into every account, doing the math for its users to work out where it is safe to spend or save, also offering a round-up feature that turns spare change into savings. Chime bank also offers an automatic saving feature that places 10% of deposits into savings.

If you are looking to open a savings account, not all digital banks offer a separate savings account, but most of them offer various savings features. Chime offers users a no-fee spending account and a complimentary savings account, which comes with tools for automated saving. At the same time, Simple offers a ‘Protected Goals Account’ with 2.02% APY for those with over $2,000 to save. SoFi offers up to 2.25% APY savings on deposits and financial planning and other advances saving features.

Each bank offers a perk that you might not find at rest, such as cashback rewards at Chime, a desktop platform available at Simple, or bill-splitting and in-app customer service – it comes down to which best matches your needs, and you may want to peruse the features that each bank offers. You may want to check for some criteria at whichever bank you choose, such as if deposits are FDIC-insured.

How safe is digital banking

Security is paramount when it comes to banking, and some may be concerned about how secure digital banks are. However, digital banks are at the cutting edge of innovation, and this includes security. They are continuing to develop new hi-tech methods of security and privacy, including identity authentication. Signing up to digital banking services involves your identity being authenticated by rigorous techniques, such as voice recognition, facial recognition, and fingerprint scanning. In many cases, the traditional banks are taking a leaf out of the digital bank book when it comes to security, which should put customer minds at ease.

What features do US digital banks offer that traditional banks don't

  • Quick and easy online application for a bank account, and approval within minutes – no paperwork required
  • Advanced budgeting features that do the math for you, meaning you can stress less about your finances
  • No hidden fees
  • Fewer fees for transactions and ATM withdrawals abroad
  • Savings accounts or non-savings accounts with interest
  • Monthly reports and forecasting
  • Responsive in-app customer service
  • Bill splitting
 

One final benefit of the US digital banks is that they are continually rolling out new financial features, products, and services, and their customers will be one of the first to try them. The future is looking bright for digital banks, and they have plenty more innovations in development to help their customers feel more in control of their finances.