Neobank Versus Traditional Bank: Which One Is Actually Better for Your Money?

Neobanks offer some advantages over traditional banks, but there are some downsides to consider when choosing where to deposit your money.

Neobanks can save you money on fees, but traditional banks may offer stronger support when problems arise. Tada Images/Shutterstock

Neobanks like Chime and SoFi can offer lower fees, sleeker app designs, and tools that traditional banks rarely match. However, there are tradeoff areas to consider: deposit protection structure, customer service, and lending access, to name a few.

Which one is better for your money? That depends entirely on how you use banking day-to-day.

What Is a Neobank, Exactly?

A neobank is a financial technology, or fintech, company that offers banking services entirely through a mobile app or website—no branches, no teller window. Everything happens on your phone.