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In today’s world, mobile banking is the norm rather than the exception for banking services. When it comes to depositing a check or withdrawing money from a bank, the days of having to drive to a branch are long gone. It is now possible to deposit checks via the mobile application for banking services, as well as transfer money between accounts. Traditional banking services may intimidate a young person who is just getting started because of the high fees and account minimums. Quite a few of them don’t even have mobile apps available. Online banking is an appealing option for a generation that has grown up with a smart phone in their pocket and all the information they require at their fingertips. Need an online banking service? Should you go with Lili vs Chime or Lili vs SoFi Bank? Here are a few options to consider.
Banking on the Go
Make sure you understand the differences between banks and online financial services when choosing an online banking service. Not all of them are covered by the FDIC. If you’re concerned about this, do your homework before settling on a provider.
Lili is an online and mobile banking company that works well for freelancers and those who work on their own. It provides tax planning tools that are specifically tailored for contract workers and freelancers, and its mobile nature is ideal for those who are always on the go. In order to open an account, no minimum deposit is required, and there are no monthly fees. Additionally, there are no physical locations because all banking takes place in the app. The digital tools available through the app are robust for freelancers, as an account holder has the ability to organize their finances based on tax needs, personal expenses, and whether they are accepting payment from customers. Bank accounts will require a Social Security number instead of an employee identification number, but it still works well for those who prefer to keep their personal and business finances separate. There are no transaction fees for unlimited transactions, free ATM access for Moneypass ATMs, and cash deposits are facilitated via the Green Dot network. A two-day early paycheck window is available for account holders who use direct deposit. The service’s mobile-only nature, with no web access, may be difficult for some to adapt to, however. At out-of-network ATMs, fees can be as high as $5, and deposits at Green Dot locations may be subject to a $5 deposit fee per transaction. It is unable to send or receive wire transfers and does not provide checkbooks. Comparing Lili vs SoFi Bank, we see that the two are fairly close, the exception being that Lili does not offer investing as SoFi does.
Chime is another mobile banking service that offers checking and savings with low fees, and it is relatively easy to open an account, even for those who may have been denied a bank account in the past due to a poor financial or credit history. It’s a good option for people who want a high-yield savings account but also need a way to receive direct deposits from their employers and don’t make many cash deposits. There are no monthly fees or overdraft charges, and it can be accessed at over 60,000 ATMs worldwide. Paychecks can arrive up to two days early for those who use direct deposit. On the other hand, cash deposits are only done through third-party retailers like Green Dot or Western Union, and mobile check deposits are only available through the app if you are signed up for direct deposit of paychecks. If we compare Lili vs Chime, we see that these two are also very similar, with Chime perhaps the better choice for those with poor credit history.
Novo offers free business checking accounts that are optimized for digital banking and online business transactions, making it an excellent online banking option for entrepreneurs. In addition, there are no monthly fees and no minimum balance requirements for this account. Fee-free transactions are available on all of its accounts, and ATM fees are refunded. Bill pay and free paper checks are two of the many features it provides for online businesses. It works well with Shopify and QuickBooks, and there are discounts available for those who need access to business software. A major drawback, however, is that there is no cash deposit available, which limits many businesses, even those who operate entirely online. It doesn’t work with domestic or international wire transfers, and it doesn’t work with bill pay for recurring payments. If we compare Lili vs Novo, we see that these two are also very similar, with Novo perhaps the better choice for those with online businesses.
SoFi Banking (formerly SoFi Money)
SoFi Banking has long since established itself as a premier online banking service, and a service for a wide variety of financial needs, especially investing, for which it initially got its start. It offers high APY, no overdraft or monthly maintenance fees, and it is the best option for those looking to earn high interest on savings but do not need access to physical bank branches. In order to use any of SoFi’s services, you must use the company’s website or mobile app. Allpoint ATMs are available for free, and two-day direct deposit is also available. On the other hand, like others, cash deposits are only made through third-party services such as Green Dot and Western Union, and can cost upwards of $5 per deposit. SoFi does not have a minimum for checking or savings accounts, and checking accounts come with debit cards.
In the financial world, mobile-only banking solutions are rapidly replacing traditional banks as the preferred method of online banking. There will be pressure on traditional banks to reduce or eliminate minimum account balances and maintenance fees as mobile banking services begin to appear online and offer many of the same services that make traditional banks useful. Your long-term goals and whether or not you have business needs will help you determine which online banking service is best suited for you.
What do I need to get started with mobile banking?
A state-issued photo ID and other forms of identity verification, a Social Security number, check stubs or tax forms, and perhaps a utility bill verifying residency are all required for a mobile bank account.
Are any of these banking services accepted at retailers?
Not in and of themselves, but all of them issue Visa or MasterCard debit or credit cards that are accepted virtually anywhere.
Do I need to have a minimum credit score to open an account?
In most cases, no, you do not, making them an attractive option for those in need of a financial account but were rejected by traditional banks due to a low credit score or credit history.
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