4 Alternatives To Checking Accounts
4 Alternatives To Checking Accounts
GoBankingRates.com
A traditional checking account is the workhorse of the personal finance world.
According to a new GOBankingRates survey of 1,000 adults, more than nine out of 10 people have one, making them more popular than savings accounts — the No. 2 most common type — by nearly 20 percentage points. People use checking accounts to receive direct deposits, make debit card purchases, transfer funds and, of course, write checks.
But the old-school, utilitarian checking account is long overdue for a makeover — and plenty of alternatives are vying to become your home base for personal money management.
Here’s a look at the most promising options. Plus, check out GOBankingRates’ best online checking accounts.
Ditch Your Old-Fashioned Checking Account for a Neobank
Many people have abandoned brick-and-mortar institutions for online banks, which typically have superior technology, better rates and fewer fees.
But there’s another digital-only option that could satisfy your checking needs and then some.
“Another alternative to traditional banks is neobanks, which operate exclusively online, typically through an app,” said Laura Adams, MBA, personal finance expert with Finder.com.
If you don’t know the term, you’re safely in the majority. Just a tiny sliver of the study’s respondents — 0.3% — keep their cash in one.
Even so, the concept is familiar to anyone who keeps their money in a digital bank.
Neobanks exist purely online with no branches or other physical infrastructure and they’re known for offering better rates and a more seamless technological experience than brick-and-mortar banks, which pass their enormous overhead costs onto their customers.
But that could just as accurately describe Ally Bank, which doesn’t qualify as a neobank.
So, What’s the Difference Between Neobanks and Online Banks?
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