4 Myths About Online Banks You Need to Stop Believing Right Now
When people switch to online bank accounts, they suddenly become evangelists.
Have you noticed this?
I have one travel-obsessed friend who goes nuts about her Schwab Bank checking account and recommends it to fellow travelers every chance she gets.
I talked to a couple of guys who absolutely love their Chime accounts — one so much he even touts it to customers at work!
When my brother-in-law told me about Bank of Internet, I thought for sure he’d just made something up. But I looked into it and realized the bank’s not only real, but it also has some pretty cool perks.
And I’m guilty, too. I recommend my Aspiration Summit account to everyone who asks — and plenty who don’t, to be honest.
Why do we do this? For one, the big banks are, well, huge, so the little guys need some word-of-mouth love to be seen.
But also because online banks rock, and we want more people to know that.
We’re Leaving Traditional Banks Behind
Banks are not the most popular businesses in the world these days. That’s putting it kindly.
Two of the top five most-hated companies in America last year were well-known banks, with Wells Fargo and Bank of America inviting the ire of customers.
I tend to avoid interactions with big banks whenever possible. They’ve become expensive to use and inconvenient to communicate with.
Thankfully, these smart companies have stepped in to fix everything we hate about traditional banks. Online bank accounts are like the anti-bank — they give us all the financial benefits of the old guys but flip the script on the annoyances of working with a monolith.
Why We’re Switching to Online Banks
To put it simply, online banks are easier to use than the traditional ones. They’re cheaper and more accessible.
No brick-and-mortar locations with 9-to-5 staffers means the online companies have way lower overhead than the old guys. So they don’t pack on the fees quite so heavily — or, at all, really.
Chime is free to use — no monthly minimums and no monthly fees. Aspiration works on a pay-what-is-fair model. You choose to set a monthly tip up to $10 or as low as $0, and you can change it anytime.
Being online also means 24/7 access — on a web browser, through an app, via text, whatever kind of service you like to use to put distance between you and a long line of cars at the drive-up window at 5 p.m. on a Friday.
I use an app to do all my banking with Aspiration, including depositing checks with my phone’s camera. Plus, I can do it anytime. Who is actually available during bank hours?!
I also love the personality of the companies behind online bank accounts. While traditional banks sometimes feel like they haven’t updated their websites since 1999, I loved the creative touches Aspiration added to make sign-up enjoyable.
Plus, in an age when we all look on the big banks with a touch of suspicion because of years of scandal and mismanagement, Aspiration has popped up with the simple motto to “Do Well. Do Good.”
The company donates 10% of revenue to charity and makes it easy for account holders to do the same. Just choose a cause you care about and an amount you want to give each month, and it’ll automatically come right out of your Summit account.
4 Myths You Need to Stop Believing About Online Banks
So, why isn’t everyone flocking to online banks en masse? It seems they just don’t understand.
In the course of my evangelizing, I hear a lot of the same concerns from folks who are afraid to cut ties with their old banks. They’re totally understandable — but usually completely based on incorrect information.
Here are four myths about online banks you should stop believing right now.
1. Your Money Isn’t Safe if You’ve Never Heard of the Company
Yes, it is. Just like any other brick-and-mortar bank, make sure you’re signing up for an FDIC-insured account, and your money will be just as safe.
For example, both Aspiration and Chime accounts are FDIC-insured through banking partners, Aspiration with Coastal Community Bank and Chime with The Bancorp Bank.
If you’re interested in getting into the weeds…
Chime’s website and app use at least at least 128-bit encryption, passkeys, two-factor authentication for password protection, as well as face ID login to keep your digital information safe. It issues a Visa debit card, which offers protection against unauthorized transactions.
Aspiration’s products use 256-bit encryption, multi-factor authentication and Touch ID login for the app. It issues a Mastercard debit card, which helps protect your information.
2. No One Is Around to Help You
If you can’t walk into a building and speak to that teller you know, you might not feel like you’re being taken care of. But good companies that offer online bank accounts also offer good customer service.
And you don’t have to wait in line for it!
One of those Chime users I mentioned, Samuel Demeny, told me, “Their customer service is top-notch …You can send a text message and within 10 or 15 minutes have a response. With [my previous bank] Wells Fargo, it was, like, two or three days.”
I’ve had a similar experience with Aspiration. While I haven’t had any issues I needed to contact customer service about over the past two years, the service I got setting up my account was delightful.
3. You Won’t Have Access to Your Cash
When my co-worker Carson Kohler told her dad about her Aspiration bank account, she says, “He was super troubled by the idea of having an online-only bank account. He named off all these scenarios where you might just want to walk into a brick-and-mortar bank.”
Maybe I’d prefer to walk into a bank if I were a bank robber, like, in an ’80s movie? The ski mask and the “Everybody on the ground now!” cybercrime just isn’t the same.
Save for that, though — and, just to be clear, I’m not a bank robber — I’m much more satisfied with my Aspiration Summit account.
It, like most online bank accounts, acts like any other checking account — and includes a debit card. You can pull money from an ATM with no fees.
With Aspiration’s Summit account, I’m reimbursed for ATM fees at any ATM, regardless of network.
With Chime, ATMs are fee-free at MoneyPass locations, which you can find in tons of spots, including Walmarts and grocery stores. Demeny said he uses the Chime app to find businesses where he can get free cash back at check out, like a nearby grocery store.
Check out this list for more banks with free ATMs. (Surprise! Five of the seven are online-only accounts.)
4. You Won’t Get the Perks of the Big Banks
Alright, so the online bank account comes with a shiny modern app, preaches some warm-and-fuzzies and costs almost nothing to keep.
But where’s the beef? You must have to give up the perks you enjoy at big banks, right?
Nope.
With Aspiration’s Summit account, you can earn 1% interest on your full balance — 100 times more than the average checking account.
Aspiration is also a full-fledged financial firm that’ll help you grow your money through investing.
You can invest through its Redwood or Flagship funds with just a $100 minimum investment.
The Redwood fund focuses on companies with sustainable environmental and business practices that are “poised for growth,” while the Flagship fund is for more conservative investors counting on long-term growth.
Chime comes with two benefits users love: an early payday and easy savings.
Unlike most financial institutions, Chime doesn’t wait to give you access to your direct deposit funds until your pay date. It adds money to your account as soon as it receives notification from your employer and immediately posts the funds to your account — up to two days early.
It also helps you save digital change when you spend. It rounds up your Visa debit card purchases to the nearest dollar and puts the difference into your savings account.
You won’t notice the extra 20, 40, 60 cents here and there — but it’ll add up quickly!
It’s like tricking yourself into being financially responsible.
Ready to Try an Online-Only Bank Account?
Alright, I’ll stop. Now that I’ve poured the perks into this post, maybe I can lay off my friends and family… and that guy behind me in line at the ice cream place.
I hope this helps you chill out about some of your fears.
If you’re ready to give these bank accounts a whirl, here are two of our favorites:
Aspiration Summit account: Sign up for free ATMs, charitable giving and a strong APY.
Chime spending and savings accounts: Sign up for automatic savings and early direct deposit.
Dana Sitar ([email protected]) is a writer and editor at The Penny Hoarder. Say hi and tell her a good joke on Twitter @danasitar.
Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. The Chime Visa® Debit Card is issued by The Bancorp Bank, N.A. or Stride Bank, N.A. pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted. The secured Chime Visa® Credit Card is issued by The Bancorp Bank, N.A. or Stride Bank, N.A. pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. Please see the back of your Card for its issuing bank.
MyPay® line of credit provided by The Bancorp Bank, N.A. or Stride Bank, N.A. MyPay services provided by Chime Capital, LLC (NMLS ID 2316451).
Chime is recommended by more of its users in the 2024 Qualtrics® NPS study when compared to top national banks and select fintechs. THE #1 MOST LOVED BANKING APP is a Registered Trademark of Chime Financial, Inc.
* Terms apply. Limited time only, must open the new account and complete qualifying activities to earn 3 individual rewards, up to a max of $350.00, as described at https://www.chime.com/policies/newmemberofferv3.
1 Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.
2 Out-of-network ATM withdrawal and over the counter advance fees may apply except at FCTI® ATMs in a 7-Eleven® or Speedway, or any Allpoint® or Visa® Plus Alliance ATM participating in the Allpoint network.
3 SpotMe® on Credit is an optional, no interest/no fee overdraft line of credit tied to the Secured Deposit Account. SpotMe on Debit is an optional, no fee service attached to your Chime Checking Account (individually or collectively, “SpotMe”). Eligibility for SpotMe requires $200 or more in qualifying direct deposits to your Chime Checking Account each month.
Qualifying members will be allowed to overdraw their Chime Checking Account and/or their Secured Deposit Account up to $20 in total, but may be later eligible for a higher combined limit of up to $200 or more based on member’s Chime account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your SpotMe Limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your SpotMe Limit. SpotMe for Credit and SpotMe on Debit share a single SpotMe limit. Your SpotMe Limit may change at any time, at Chime or its banking partners’ discretion. Although there are no overdraft fees, there may be out-of-network or third-party fees associated with ATM transactions or OTC cash withdrawal fees at retailers. SpotMe won’t cover non-card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. SpotMe Terms and Conditions.
4 With a qualifying direct deposit, earn 1.5% cash back on eligible secured Chime Visa® Credit Card purchases. Please refer to the Secured Chime Visa® Credit Card – Cash Rewards Program Addendum for details and more information on rotating cash back categories.
5 On-time payment history may have a positive impact on your credit score. Late payment may negatively impact your credit score. Chime will report your activities to Transunion®, Experian®, and Equifax®. Impact on your credit may vary, as Credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.
6 Out-of-network ATM withdrawal and OTC advance fees may apply. View The Bancorp agreement or Stride agreement for details; see back of card for issuer.
7 Money added to Chime Card™ will be held in a secured deposit account as collateral for your Chime Card, and you can spend up to this amount. You can use money deposited in your Secured Deposit Account to pay off your charges at the end of every month.
8 You must notify your financial institution immediately of any unauthorized use. For specific restrictions, limitations and other details, please consult your issuer.
9 To be eligible for Chime+™ status, you must receive a qualifying direct deposit to your Chime Checking Account in the preceding 34 days. Certain products marketed as Chime+ benefits have additional eligibility requirements. While some Chime+ benefits may have associated fees, none of these fees are mandatory to access Chime+ benefits or to maintain Chime+ status. See Chime+ Terms and Conditions for details.
10 To be eligible for MyPay, you must receive qualifying direct deposits to your Chime Checking Account in the preceding 36 days as set forth in the MyPay Agreement. A qualifying direct deposit is a deposit from an employer, payroll provider, gig economy payer, government benefits payer, or other permitted source of income by Automated Clearing House (“ACH”) or Original Credit Transaction (“OCT”). Your MyPay Credit Limit and Maximum Available Advance may change at any time. MyPay is a line of credit and available limits are based on estimated income and risk-based criteria. Eligible members may be offered a $20 – $500 Credit Limit per pay period. Your Credit Limit and Maximum Available Advance will be displayed to you within the Chime app. MyPay is currently only available to eligible Chime members in certain states. Other restrictions may apply. See Bancorp MyPay Agreement or Stride MyPay Agreement for details.
11 Top three national bank ranking according to the Federal Reserve Statistical Release based on domestic assets; number of ATMs self-reported by Chase, Bank of America and Wells Fargo – June 2025.
12 To apply for a Chime Card, you must also open a Chime Checking Account.
13 Chime Visa® Credit Card holders – Deposits and debit refunds go to your Checking Account, then transfer to your Chime Card Secured Deposit Account – other than Chime Card cash deposits at retailers, which go to your Chime Card Account, then transfer to your Secured Deposit Account. Funds are moved from your Secured Deposit Account to your Checking Account to facilitate outbound transfers and debit purchases. Your Available balance is the money you can spend with your Chime Card or Checking Account. See account agreements and statements for details.
14 Chime will report the following activities, as applicable, to TransUnion®, Experian®, and Equifax®: amount past due; payment status of the last paid-off balance; how long you’ve had your card; current statement balance; last balance payment date; and highest balance before paying it off.
