Banking apps vs. checking accounts

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Fund management designed specifically for your smartphone.

Digital banks provide 100% of their products and services electronically. With no brick-and-mortar spots in sight, you can track spending and pay bills from anywhere. But if you prefer in-person support or banking at a branch, they won’t be right for you.

What are the benefits of a digital bank app?

There are several perks of using a digital bank. Among them:

  • They understand your habits. Digital banking apps have spending analysis features that evaluate where your cash is going. Look for automatic spending categorization, notifications, alerts and monthly reports.
  • You can sync them with your budget. Use the spending analysis to set up budgets and track progress. The app may allow you to set goals and spend limits to make veering off course more difficult.
  • Traveling can be more convenient. Streamline your next vacation by holding multiple currencies at once, skipping international ATM or foreign currency fees and locking or unlocking your card if it gets lost or stolen.
  • You can set up automated savings. Some digital banks prioritize stashing cash away. For instance, rounding transactions to the nearest dollar and sending the difference to your savings account.

What are the drawbacks of a digital bank app?

Digital bank apps won’t suit everyone’s tastes. Before opening an account, consider these potential pitfalls:

  • No in-person help. If you’re looking to navigate a complex financial plan with the aid of a professional, you might want to stick with a more traditional setup.
  • Smaller product offerings. While industry giants also offer loans, mortgages and investment accounts, digital banks tend to specialize in checking and savings.
  • Compatibility may be limited. Make sure your smartphone can handle whichever digital bank you choose — not all operating systems may be supported.
  • Reliance on Wi-Fi. Technical difficulties could derail your ability to access and manage personal finances, which might present too big a risk for some.

Compare digital bank apps

Name Product APY ATMs Fee
38,000 fee-free ATMs nationwide
Linked checking and savings accounts from a mobile-first bank that’s light on fees.
Emma helps you in avoiding overdrafts, finding wasteful subscriptions and giving you control over your finances.
2.15% on balances of $10,000+
2.02% on balances of $0 to $9,999
40,000 AllPoint ATMs in Simple’s network
Banking and budgeting in one simple app.
42,000 ATMs across the country
Moven automatically analyzes your spending and gives you instant receipts and insights so you can spend, save and live smarter.
42,000 ATMs nationwide
(can be waived)
GoBank provides tools to help you build a budget and stick to it. No overdraft fees. Monthly and other fees apply.
Over 55,000 fee-free Allpoint ATMs
(can be waived)
An account designated specifically for students with access to over 55,000 fee-free Allpoint ATMs, money management tools and a one-of-a-kind recognition program.
55,000 AllPoint ATMs around the world for free
No monthly fees. No foreign transaction fees. No fees at 55,000+ Allpoint ATMs.

Compare up to 4 providers

Digital bank apps vs transaction accounts

Not sure whether a digital bank app or a checking account is better for your financial needs? Compare both side-by-side to make the best choice.

FeatureDigital bank appsTransaction accounts
FeesTypically low feeVaries
Spending categorization and analysisYesSome banks offer this
Payment splittingTypically yesSome banks offer this
Bill detection and automationTypically yesSome banks offer this
Automated savingsSome offer thisSome banks offer this
No fees for travelingTypically yesSome banks offer this
Other productsTypically no, but some do or will do so in futureYes
Payment optionsGenerally a wide range of optionsGenerally a wide range of options
Internet banking on desktopNoYes

Prepaid cards vs debit cards

When comparing your digital bank options, you may notice that some offer a prepaid card optin. Weigh the capabilities of each evenly before committing:

Prepaid cardsDebit cards
  • Reloadable
  • Hold a limited amount of funds
  • Good option for traveling
  • Option for under 18s
  • Funds aren’t guaranteed by the government because they aren’t considered deposits
  • Fees may apply for reloading
  • Expiration dates apply
  • Used to access funds in a checking account
  • Accounts can hold a large amount of funds
  • Funds up to $250,000 guaranteed by the government (per bank)
  • Funds remain in the account even if the card expires
  • Some card fees may apply

How do I sign up for a digital bank app?

The sign-up process varies between providers, but start by downloading the provider’s app to your smartphone. Then, verify your identity by providing an ID such as your driver’s license or passport.

You will also need to send personal details such as name, address and contact information. Some apps will send you a physical card, while others allow you to start spending instantly with a virtual debit card.

Bottom line

For the electronically savvy, banking apps can make managing funds quick and convenient. But if you prefer in-person support and banking at branch locations, compare other checking accounts to find the right match.

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