3 California-based digital banks you should take a look at

By Edlyn Cardoza

With the ease of mobile banking, we hardly go into a bank branch. Most people have turned to digital banks or FinTech companies offering banking services. A neobank or a digital bank is a FinTech company offering banking services, typically backed by larger financial institutions.

The main difference between traditional banks and neobanks is that neobanks are entirely digital. Their services are offered via mobile apps or desktop sites, while traditional banks also use physical branches.

Neobanks and challenger banks are well-positioned to meet the digital challenges and garner the benefits of the new digital economy. As the market transforms, they are shaking up the traditional branch-based banking systems and pushinFFg the industry to become more agile and competitive.

Here are 3 digital banks you should take a look at:

• Acorns

Acorns is one of the first companies to offer micro-investing to the world. The proprietary financial engine allows customers to round up spare change from everyday purchases and invests these sub-dollar amounts into a professionally managed portfolio of index funds. Connect any credit or debit card and a checking account, then spend money like you normally do to watch your portfolio grow with the market. It’s easy to get started when you can invest any amount, any time, with no commissions or minimums.

• Chime

Chime is a financial technology company founded on the premise that basic banking services should be helpful, easy, and free. Chime wants to profit with its members, not from them. That’s why their model doesn’t rely on overdraft fees, monthly service fees, service fees, minimum balance requirements, and more. Chime partners with regional banks to design member-first financial products. This creates a more competitive market with better, lower-cost options for everyday Americans who aren’t being served well by traditional banks. They help drive innovation, inclusion, and access across the industry.

• Varo

Varo is an entirely new kind of bank. They are working toward its mission with a team that uniquely and strategically combines banking veterans with technology experts. The banking experts provide decades of industry experience, and the tech experts can build a mobile app that offers everyone access to premium banking, including quicker access to your money, high-yield savings, and automatic saving tools. Varo has raised over $992.4 million to date from leading institutional investors and strategic partners, including Warburg Pincus, The Rise Fund, Gallatin Point Capital, Harbourvest Partners, Progressive Insurance, Russell Westbrook Enterprises, and Lone Pine Capital. Varo.

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