The so-called fintech – financial technology – startups tend to change the way people bank. Also known as neobanks, these financial institutions tend to overcome all the stereotypes in the banking industry. Most importantly, they operate in a digital manner. They offer low fees, better experiences and a seamless online venture.
Now, before digging into deeper details and providing some names regarding the best neobanks for offshore entrepreneurs, there might be a few things you need to know in order to become familiar with this concept. You need to find out how these banks work, what they do and what their operating principles are.
Understanding the neobank concept
Neobanks are often referred to as challenger banks. No matter what name you find on a bank’s official website, these terms refer to the exact same things – there are no differences. These fintech companies provide software and applications to ease the online banking experience – mostly aimed at those who use their mobile gadgets for everything.Different neobanks are specialized in different banking products. Some of them are after checking accounts, while others have specialized in savings accounts. Of course, you can also find general banks where you can do pretty much everything you would in a traditional bank. They are more transparent, even though some of them can partner with traditional banks.
Neobanks showed up during the financial crisis that challenged the whole world between 2007 and 2009. They are mostly known as neobanks in the USA, while the UK refers to them as challenger banks. Other countries may use different terms. The general idea is fairly simple – if there are no brick and mortar buildings involved, you usually deal with a neobank.
Such companies tend to change the way people see the banking sector. The system is changing – no doubts about it. It is a modern trend. Try to see it as Uber in the taxi industry or Airbnb in the hospitality industry. Now that you understand the concept, what are the top-rated neobanks out there and what kind of services should you expect?
Vialet
If you like the idea of using Mastercard all over the world and making payments anywhere, anytime without being charged some random fees in the SEPA zone, Vialet is an extremely reliable option that will give you a free IBAN account. You will be able to start using the account straight away – after all, the first card does not cost any money at all.There are no maintenance fees associated with the account, so forget about those monthly charges that make no sense whatsoever. You can have one account and while you can load the card with all kinds of currencies, everything is converted into euro. The bank does not allow joint accounts, but only personal accounts. Furthermore, the card is accepted all over the world.
Keep in mind that maintenance fees apply up to €3 if your card is inactive and you don’t use it.
You can apply for the account and use it with your mobile device – simple as that. Money transfers and SEPA payments are free of charge. The card is connected to the application, so you will get a notification whenever you receive, send or spend money – excellent to keep on top of your expenses. You can make contactless payments or simply use the pin code.
In terms of security, you have a 3D secure system, so your online purchases are always safe. Besides, should you misplace or lose your card, you can always block it. It takes seconds only. You can do it over the application, rather than call the customer service or wait in queues. A few taps on your mobile device will get the card blocked straight away – how convenient is that?
Revolut
Founded in 2015 in the UK, Revolut has grown to become one of the leading financial technology companies. These days, it’s available in around 40 different countries, including EU countries, the UK, the USA, Singapore, Australia, Switzerland, Canada and Japan.Revolut offers a broad range of financial solutions. You can open a bank account, get a debit card (both virtual and physical), foreign exchange solutions, savings accounts, crypto and even insurance policies. It’s mostly appreciated for easy transfers, good exchange rates and low overall fees.
Most people use Revolut through a mobile app, which is straightforward and easy to use.
Revolut also allows access to cash management accounts. These accounts are basically a mix of everything, featuring elements from savings, checking and investment accounts. They come with a plethora of rewards, so they make quite a good option if you require versatility from your accounts.
Apart from free services, Revolut has premium alternatives as well. You’ll have to pay a monthly fee, but you have some extra features. For instance, you could gain access to an airport lounge or perhaps get travel insurance. They’re worth it if you actually need these features, so double check upfront.
In terms of safety and security, the app is quite strong. You’ll get notifications in real time as you spend money. Besides, apart from the two factor authentication, you can also set geographical boundaries for access to the card, not to mention the possibility to freeze or unfreeze a card on the spot.
N26
N26 originated in Germany in 2013. The neobank offers numerous services in countries like the UK, Austria, France, Spain, the Netherlands, the USA and Switzerland, among many others. It gained popularity for its straightforward services and mobile approach, making it simple to use by anyone.N26 is known for more things, but mainly for its application. It’s super simple to use and allows anything you can think of in no time. It’s convenient and offers quite a few innovative solutions. For example, you can get a checking account with no fees whatsoever.
If you struggle saving, you also have access to budgeting tools. You can make mobile payments with just a few taps too. All these without a monthly fee, which is why it’s so popular today.
Apart from the 100% mobile approach, N26 has gained popularity with its global approach too, supporting the USA and most of Europe. At the moment, its presence in Asia is relatively limited, so it may not be the best option for the Asian market.
In terms of account types, the standard option is free. You also have the Smart account for a small monthly fee, but with a few extra features. Then, there’s the You account, which costs more, as well as the ultimate Metal account.
None of these accounts has a deposit limit. All of them have a decent interest rate, with the Metal account boosting a rate of 2.25%. In other words, if you make a good deposit, the interest rate will most likely cover the monthly expense.
Starling Bank
Starling Bank is another neobank based in the UK. It was founded in 2014. It gained notoriety for being accepted in places where traditional cards aren’t accepted. Besides, it has a strong focus on customer service. Obviously, it has its own mobile application and quite a few innovative elements.Like Revolut and a few other neobanks, it offers notifications in real time as you spend money. You’ll be aware of your balance no matter what, so you can keep an eye on your funds at all times. The mobile app provides access to lots of budgeting tools as well.
For example, you could organize your expenses by different categories. You can also get insights into your spending habits. If you’re struggling to save, Starling Bank will help out.
The neobank also allows you to get a business account, which obviously has slightly different features. Such accounts are suitable for freelancers, as well as self-employed individuals. Unlike most expectations, you won’t need to pay a monthly fee for the business account.
You can also keep track of your expenses and even monitor them to ensure you’re not overspending.
Logging in and authenticating requires biometric data, such as your face or fingerprint. It’s a matter of security to ensure no random users access the app.
Talking about security, you also have the option to freeze or unfreeze a card straight away if you think the data has been compromised. There are also security settings based on your location, not to mention the classic two factor authentication.
Varo
Struggling to find neobanks that mainly serve the American market? No problem. Established in 2015, Varo is a neobank that operates exclusively in the USA. It serves the American market and while the card can be used all over the world, the neobank isn’t open to those outside of the USA.Varo offers an impressive array of services. You can get the classic savings or checking accounts, but compared to other neobanks in our list, it also offers access to traditional credit cards, as well as personal loans for all kinds of necessities.
Interest rates vary based on the account. Another good news is fees are relatively low. Plus, like all the other neobanks out there, it has an intuitive and simple mobile app. There’s no experience required, you’ll get how it works straight away.
Varo’s strongest point is the fact that you don’t need to pay any fees. Forget about monthly maintenance fees. Even if you get a physical card and withdraw cash at an ATM, you won’t need to pay any fees. Got an overdraft? No problem, there are no fees coming with it either.
If you do go for the savings account, you’ll love the competitive rates.
As for the lending products, they’ve been recently introduced into Varo’s portfolio. You can get personal loans for personal needs, but also smaller loans to build your credit score. A good credit score will help you reach your financial goals faster and open the door to better financial products in the future.
Aspiration
Talking about neobanks operating in the USA, Aspiration is also worth some consideration. It’s one of the oldest neobanks in the USA, having been established in 2013. It’s a moral neobank, with a strong focus and sustainability.Social responsibility is also part of its mission. Simply put, the bank tries to help you align your financial decisions with your morals and values. On the same note, Aspiration is appreciated for its overall commitment to give a little back to the American community.
One of its features is known as the conscience coalition. It allows you to track companies the neobank invests in, but also their environmental impact.
But enough with morals and ethics, here’s what you can get from Aspiration.
The neobank has partnered up with the Coastal Community Bank, so the two offer many products in common. For example, you’ll be able to open a cash management account, but also get FDIC insurance for it.
Interest rates are pretty good too on both savings and checking accounts. Besides, once you get the debit card, make sure to use it as often as possible. You’ll get a series of cashback rewards for all kinds of purchases.
Payoneer
Payoneer has grown to become one of the most recognized neobanks in the world. Now, compared to other neobanks on our list, this one’s mainly catering to business customers. Basically, it makes a good choice for companies, offering a bunch of services to ease transactions.While many neobanks accept business accounts, Payoneer has specialized in international transactions. In other words, if you run a business with operations all over the world (such as a simple online shop that ships internationally), Payoneer could be the answer.
In terms of accounts and currencies, Payoneer allows you to open a business account in multiple currencies. Don’t worry about fees and exchange rates, they’re quite low and won’t really make the difference in your profits.
The multi-currency account allows you to handle cross-border payments with little to no extra expenses. Talking about currencies, you have access to about 70 different currencies, from big worldwide currencies to smaller local ones.
If you’re still unsure about Payoneer, you should know that it operates and has customers in nearly 200 countries. Struggling with the language? It’s available in almost 20 languages. And with more than five million users, there are literally no reasons not to include it in your possible options.
Despite having a strong focus towards business users, Payoneer also has a more personal touch. Basically, apart from business accounts, you can get marketplace and freelancer accounts as well.
Moreover, accounts are available in two tiers. Each tier comes with a few different features, so it’s worth checking all the extras before making a decision. For example, the Lite version is mainly aimed at freelancers or marketplace users.
SoFi
SoFi stands for Social Finance Inc. The neobank was established in 2011. It was a project without a clear aim back then, as it was built by a few Stanford students. However, in 2012, SoFi released a program for student loans, covering both private and federal loans.One thing led to another and today, SoFi serves around seven million customers.
Obviously, services have also diversified and evolved from classic student loan refinancing. Today, users can benefit from personal banking as well, let alone insurance packages, investment options and even lending opportunities, just to name a few.
SoFi stands out with good interest rates for most accounts, but specifically for checking and savings accounts. At the same time, you won’t be asked for any initial deposits in order to start an account. You can do it with literally no money at all.
And once you deposit money, there are no minimum requirements to start earning interest.
SoFi also takes pride in offering bank accounts with no fees. Forget about monthly fees for maintenance, let alone fees for withdrawing cash from ATMs or overdraft.
All these things are available through an easy and straightforward mobile app. Apart from no fees and competitive interest rates, you’ll also have the possibility to earn rewards on different packages and expenses.
Plus, if you’re not sure how to manage your money, you can always take advantage of the SoFi Wealth package, which gives you access to different financial planners on a 24/7 basis.
Such services are considered premium. However, they don’t require paying fees. But then, you’ll need to make a direct deposit to your savings or checking account for them to become available.
Chime
Chime is yet another American neobank. Established in San Francisco, it partnered up with a series of different banks, only to offer access to as many services as possible. Some of these partners include Stride Bank, N.A. or The Bancorp Bank, N.A. They’re body FDIC insured, so your money is safe.Chime does have a few proprietary products too. The primary focus is on savings and checking accounts. Furthermore, Chime is renowned for offering a series of tools to help customers build a good credit score. If that’s your goal to access larger financial products, Chime is the answer.
When it comes to the checking account, you’ll gain access to over 50,000 ATMs with no fees whatsoever. Besides, you can also make an early direct deposit whenever you feel like. Most clients are eligible to overdraw their accounts by $200 or less on debit card expenses. All these without any fees at all.
Like for any other overdraft feature, make sure you’re eligible for it.
Now, back to the credit building tools, Chime has built something known as the Chime Credit Builder Secured Visa Credit Card. Its primary goal is to help you build your credit score. There are no fees associated with it, let alone minimum deposit requirements.
Apart from all these, Chime is just as good for everyday expenses, such as shopping, bills, money transfers and so on. The app is well rated on official stores, so you just can’t go wrong with it.
Monzo
Established in the UK, Monzo has become one of the world’s leading neobanks. It offers more types of accounts – current accounts, premium packages, joint accounts and even an account for youngsters – 16 and 17 years old. There is one major eligibility criteria to remember – you need to be a resident of the UK in order to sign up with this neobank.The app is quite versatile and allows good budgeting of your money. You can break your spending down, set up with some spending limits for different services and so on. You also have a pot feature – save change with most transactions, but also earn some interest on your savings. Then, if you get your salary into this account, you will be paid one day upfront to ensure you do not miss any payments.
There are not too many fees associated with your Monzo account. There are two major circumstances you must remember. You can withdraw cash abroad, as long as it is less than £200 for a current account or less than £400 on a premium account. Exceed this limit and you will pay 3% in fees. Moreover, an overdraft will cost you 19%, 29% or 39% in interest, depending on your credit score.
Premium accounts come with a few bundles to choose from. You can manage the money with direct debit notifications as well. Spending on the card abroad does not incur any fees and local ATM withdrawals are unlimited.
And a bonus neobank…
The above-mentioned options are probably the most reputable neobanks out there. Still undecided? Here is a bonus for you to check out.Aion is an all-inclusive neobank established in Belgium. It provides one of the highest interest rates on savings accounts in Europe, as well as easy access to various types of investments. The account comes with a fee, but this is pretty much it. It only allows customers from a bunch of European countries – Austria, Denmark, Finland, the UK, France, Italy, Poland, Romania, Germany and a few others.
You can start banking with Aion straight away. If you have a smartphone, download the app and sign up. You will need to enter your phone number and get an invitation link. There are two types of membership, with the basic one costing under €4 a month. The premium one is €19 a month and comes with plenty of appealing perks.
While mostly aimed at people who want to save, Aion is suitable for everyday uses as well and offers a few different types of accounts. Everything is done digitally, so forget about card readers and branch visits.
Further Options
Still unable to find something precisely for your needs? Here are a few other options to consider. Keep in mind that like all other neobanks, these options cater to particular types of customers. They serve certain geographical areas and they have both generic and personalized types of accounts.
Research each option carefully and make sure you put your necessities first.
Suitable Neobanks for Individuals
- Alliant Credit Union
- Deutsche Kreditbank DKB
- Currensea
- Axos Bank
- TallyMoney
- Chip
- Upgrade
- Acorns
Suitable Neobanks for Businesses
- Wallester
- Moss
- Nebeus
- Airwallex
- OneMoneyWay
- Soldo
Conclusion
As a short final conclusion, neobanks are more accessible than ever. The most reputable ones are backed by traditional financial institutions, so your money is safe. Many of them allow international customers – ideal for offshore applications and not only. Some others restrict their clients to certain locations. No matter where you are or where you want to go, any of the above-mentioned solutions will give you a good alternative to traditional banks.Here is a thread discussing these and many more banks already List of Neobanks.
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