Why You Should Think Twice Before Using These Banks | Banking Advice
Key Takeaways
- Neobank checking accounts scored 52 points lower for overall satisfaction than checking accounts with online banks in the 2026 JD Power U.S. Direct Banking Satisfaction Study.
- Partner banks hold neobank customer deposits, which can potentially complicate customer service and access to funds.
- Customers using neobanks should ask where their money is held, how customer support works and how FDIC insurance applies.
Neobanks offer checking accounts, savings accounts and debit cards, but most of them aren’t actually banks. That distinction matters when digital convenience doesn’t translate into dependable service. Neobank customers may have lower customer satisfaction than customers of federally chartered online banks due to issues with debit cards, fraud and sometimes hard-to-reach customer support.
Neobank Customers Have Lower Satisfaction
In the 2026 JD Power U.S. Direct Banking Satisfaction Study, there was a gap between the satisfaction scores for online banks and neobanks. Online bank checking accounts scored 674 out of 1,000 compared with 622 for neobanks – a difference of 52 points. The gap was smaller for high-yield savings accounts, as online banks scored 689 compared with 657 for neobanks – a 32-point difference.
The lower scores were driven by:
- More frequent problems with debit cards and fraudulent or unauthorized activity
- Lower satisfaction with customer support via phone, online chat and email
- Difficulties with reaching customer service and quickly resolving problems
But the study found that neobanks and online banks both performed well on personalization, helping customers grow their money and avoid fees.
Neobanks Aren’t the Same as Online Banks
Neobanks may look similar to online banks, but there’s a difference. Federally chartered online banks directly accept deposits and are regulated as banks. Neobanks are financial technology companies that provide banking services but work with partner banks instead of holding a bank charter.
“An online bank is a real, chartered bank,” says Leo Chen, Ph.D., assistant professor of finance at the University of South Florida. “A neobank is usually not a bank at all; instead, it partners with one or more FDIC-insured banks.”
Chen says some fintechs, such as SoFi, have obtained their own bank charters to become online banks.
Because neobanks work with one or more chartered banks that hold deposits, the fintech manages the customer-facing experience, and the partner bank holds the money.
“Since the industry uses these labels loosely, the better question isn’t ‘online bank or neobank?’ It’s ‘which company actually holds my money?'” says Mehdi Zare, founder and methodology architect of Bina Capital.
Which Company Actually Holds My Money?
| Financial Institution | Chartered Bank |
| Acorns | Lincoln Savings Bank or NBKC bank |
| Albert | Stride Bank or Wells Fargo Bank |
| Ally | Ally Bank |
| American Express | American Express National Bank |
| Capital One | Capital One |
| Cash App | Sutton Bank or The Bancorp Bank |
| Charles Schwab Bank | Charles Schwab Bank |
| Chime | Stride Bank or The Bancorp Bank |
| Credit Karma Money | MVB Bank |
| Current | Choice Financial Group or Cross River Bank |
| Dave | Coastal Community Bank |
| GO2Bank | Green Dot Bank |
| MoneyLion | Pathward |
| OnePay | Coastal Community Bank or Lead Bank |
| PayPal | The Bancorp Bank or Synchrony Bank |
| Revolut | Cross River bank |
| Robinhood | Coastal Community Bank |
| SoFi | SoFi Bank |
| Stash | Stride Bank |
| T-Mobile Money | Coastal Community Bank |
| Upgrade | Cross River Bank or The Bancorp Bank |
| Varo | Varo Bank |
| Venmo | Goldman Sachs Bank, JPMorgan Chase Bank or Wells Fargo Bank |
| Walmart MoneyCard | Green Dot Bank |
| Wisely by ADP | Fifth Third Bank |
Why Neobank Problems Can Be Harder to Resolve
With a federally chartered online bank, customers deal directly with the institution that holds their deposits. Neobank partners handle deposits and transactions while the fintech manages the app and customer service.
The neobank disconnection between deposits and customer service can make resolving problems more complicated when transactions fail, accounts are frozen or balances don’t match.
Nipoon Donta, software engineer at Walmart Global Technology, says customers may struggle to identify which company can resolve their problem. “There are two books of record – the neobank’s subledger that shows your in-app balance and the partner bank’s core ledger that legally holds the money,” he says. “When they disagree, neither support team alone can resolve it.”
That’s the problem more than 100,000 customers faced when financial technology intermediary Synapse filed for bankruptcy in 2024. Their money was held in FDIC-insured accounts, there were discrepancies in account records that delayed access to their funds. Some haven’t recovered their full balances.
FDIC insurance didn’t help because it was the intermediary, not the banks, that failed. When records don’t clearly show who owns the money, it can take time to get back. “Know the limits of pass-through insurance,” says Zare. “It only works if the records show which deposits belong to you, and it doesn’t cover the fintech’s own failure.”
Zare points out that money in the app also counts toward the FDIC’s $250,000 limit for other deposits at that bank in the same ownership category.
How To Decide Whether a Neobank Is Right for You
Neobanks have drawbacks but aren’t automatically a bad choice. A neobank could offer valuable features, such as low fees, early direct deposit or competitive savings rates. Consider these factors as you decide whether to open an account with a neobank:
- Who holds your deposits. Look for a clear explanation of how your money moves and whether it’s eligible for FDIC pass-through deposit insurance.
- Customer service quality. Find out how you can reach customer service and find out how the company handles fraud, frozen accounts and disputes. Look for customer reviews that describe problems – resolved or not.
- Account features. A competitive annual percentage yield or budgeting tool could make a neobank account more attractive.
- Red flags. Vague disclosures, unclear partner bank relationships and customer service issues should give you pause.
“Don’t ignore the account agreement and the app’s disclosures for the name of the actual partner bank,” says Chen. “Read before you sign. We can also use the FDIC’s BankFind tool to independently confirm.”
Zare says a neobank can be a reasonable choice if it’s not the only place your money lives.
“A neobank can be a good fit for spending, budgeting or receiving your paycheck,” says Zare, “as long as you also keep an account directly at an FDIC-insured bank with at least one or two months of living expenses in it.”
