How to Open a Neobank Account Online and Why to use a Neobank

Posted by  Fintra , updated 2022-07-11

How to Open a Neobank Account Online and Why to use a Neobank

Neobanks are termed as digital banks, “Challenger Banks", or banking alternatives which have been hosted or built on a cloud-accessible platform. This means anyone can open a neobank account online- It’s entirely done digitally without having much read about the requirements. One can simply prepare documents and scan them beforehand- this makes life so easy while applying for an account.

Neobanks or also known as financial tech (FinTech) applications, provide banking services, but they've no physical address, they only exist as an online entity. While not being banks themselves, these apps, partner with FDIC-approved banks to proffer the same protection and ensure transactions get covered appropriately.

Fintra is here to assist and guide you on how to open an online account in a neobank. The topics we will cover are:

  1. Why Should You Use a Neobank?
  2. The Disadvantages of Neobanks
  3. How do Neobanks Make Money?
  4. How to Open a Neobank Account Online?

As we know, neobanks are the financial tech firms that usually partner with other banks to offer digital-only accounts. Although they’ve been around for a little over a decade, they’re gaining traction. Without any doubt, we can say neobanks are furnishing digital banking services on steroids! It's phenomenal to witness the digital empowerment and financial possibilities which they're offering to the underbanked and unbanked population. A few of the primary reasons for the success of neobanks are their ability to facilitate financial inclusion with digitized convenience, lower cost, and personalized customer experiences.  

Neobanks successfully bridge the experiential gaps between traditional banking services and evolving customer expectations. To know more about neobanks, please click here

Why Should You Use a Neobank?

                       neobank advantages

Amongst the various reasons why one may desire to explore the new frontier in banking, the following are a few of the features which make neobanks a great option:

To learn more about the advantages of neobanks please click here.

                          why use a neobank

The Disadvantages of Neobanks

Inevitably, traditional banks do have some advantages over neobanks. Following are some drawbacks of using FinTech for finances:


To learn more about the disadvantages of neobanks please click here.

How do Neobanks Make Money?

It can be a bit doubtful about using neobank and their apps when you witness that they’re offering many services for free. One might ponder how neobanks make money? The answer is that neobanks have a different business model than that of traditional banks. These institutions usually make a good amount of their money from merchants whenever a user uses their debit card to make purchases. Being smaller agencies than banks, neobanks are allowed to obtain greater percentages through interchanges, these are the funds a merchant pays as a service fee when an individual uses a card. This is why one might have observed that some businesses do require a minimum amount of money to use a card. This ensures they are making profits rather than succumbing to those fees on smaller transactions.

On the other hand, neobanks sometimes make money from ATM transactions. Although they provide high number of free ATM options, these neobanks make profits if a user uses an ATM that is out of their network. Moreover, at times, neobanks even offer tiered banking services, the higher levels where they provide greater or new options, but with a subscription fee.

How to Open a Neobank Account Online?

                           open neobank account online

It is extremely easy to open an online account in a neobank. One can have it running within minutes! Following are the steps:

Before deciding on an account with a neobank first look at the various options available and do research. Decide which of the services offered by the neoobank account suits your needs. One can even consider multiple options because each account will provide different benefits and rewards options. Some of the most popular neobanks can be found here. Do note various neobanks specialize in different services.

Thus, read the reviews and research as it will enable you to select the right account that will satisfy your desires and pockets.

After the selection is done, download the app for the chosen neobank(s).

After the app has been downloaded, creating an account will simply take a few minutes. First, it will ask for some personal information like your name and address, phone number, email, and social security number for completing the ID verification. Typically, a code will be sent through phone and email to verify the information is correct. Once that is accomplished, customization options will be given.

Then, the app will offer to assist in setting up a direct deposit and it will offer to let funds get deposited into your account if you desire. Do note this step may also be done later whenever you desire and not at startup. After setup is completed, the neobank will ship the debit card to your address immediately. Moreover, many of these neobank's accounts also allow using a virtual card, which can activate promptly, enabling the user to use its new account within minutes! Once the card arrives, one has to activate it, and eventually, it's ready to be used! You can now enjoy using the neobanking services with a variety of rewards and options! 

                         banking made easy


It's predicted in the next few years, along with the global neobank market, even in India, neobanks are slated to grow tremendously. Hence, for those who are desiring to enter the neobanking industry, Fintra experts believe this is the opportune time. 

You might ponder about should you switch to a neobank or not. Indeed neobanks are easy to use; hence, it gets tempting to use them as the sole banking experience. However, do remember they come with limited service options, and there are services which are at times easier to manage with a physical banking account. Therefore, the ideal answer to whether you should make the switch will be to have an account in a traditional bank and a neobank. You can use a personal bank account to manage specific services and use a neobank(s) to deal with others, furnishing you with exceptional versatility.