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The Bullish Guide to Neobanks

Your money is on fire. Seriously. During the COVID-19 pandemic, the government dropped interest rates to zero and they’ve indicated they don’t plan on raising them anytime soon. This is the reason you’re not making a whole lot of money on what’s in your bank account. 

Odds are if you’re using a big, old-fashioned bank like Bank of America or BBVA, you’re getting next to no interest. You don’t want to keep your money wrapped up in an account where it’s not generating any money for you, especially since your money loses money every year because of inflation. This has people looking away from their traditional banks to neobanks.

Neobanks operate without physical branches. This allows them to pass along money that would otherwise be spent on rents or upkeep to their users in the form of higher interest rates or rewards. This is part of what has helped the neobank enter the zeitgeist. You’ve probably heard of neobanks like SoFi or Marcus, but maybe you’re looking for a lil’ more moolah from your moolah. 

So, we’ve put together a shortlist of neobanks to help you find the highest-yielding ones:

1. HMBradley

HMBradley launched in March 2020 with a unique offering for users: “If you save with us, we’ll help you save more.” The company’s hybrid savings-checking account helps customers make at least 0.5% interest, but those who save more can make up to 3%. After setting up direct deposit on HMBradley, their savings tiers along with your amount of savings will decide your interest rate.

So what does this look like and how does this break down? 

  • Those who save at least 20% of their deposits can expect to net 3% annual percentage yield (APY)
  • Those who save 15% will get 2%
  • Those who save 10% will get 1%
  • Those who save at least 5% will get 0.5%

The tiers are adjusted for your account quarterly, but all new users start making 1% APY. All-in-all, HMBradley has created an incentive to save, and it’s a significant step up over traditional banks. People used to full-service banks will find HMBradley’s interface to be minimal, at least relatively speaking. This could be great for some people and disappointing for others. But at its barebones, HMBradley is one of the simplest ways to make money on your money.

Interest rate: 0.5% to 3% (Depends on savings; direct deposit required)

2. Varo

One of the oldest and most popular neobanks is Varo. This neobank launched in 2015 and boasts over 1 million customers. Varo offers full service digital banking with no monthly fees, no overdrafts and access to over 55,000 fee-free ATMs. Varo’s savings account starts users off at 0.4%. However, users can quickly get that number up to 2.8% by either making five purchases with their Varo debit card or making direct deposits of $1,000 or more.

Varo also has some added bells and whistles which might impress folks coming from traditional banks. If you set up direct deposit, the company claims that users will “get [their] paycheck up to two days early.” If that doesn’t cut it, you can use the “Varo Advance Platform” to pull up to $100 in instant cash for a small fee.

Varo might be a top pick for those who want to make the most of a neobank with robust features, easy-to-understand design and high interest.

Interest rate: 0.4% (no direct deposit) or 2.8% (with qualifying direct deposit or spend)

3. OnJuno

OnJuno is a neobank offering up to 2.15% APY and 5% cash back deals on brands of your choice. The latter is differentiating in a space where many banks simply offer a way to make money on your money. OnJuno allows you to select up to five brands, like Netflix, Target, Airbnb or Spotify, to get cash back when you spend.

OnJuno is the first and only bank on our list that specifically caters to immigrants. For any international residents of the U.S., OnJuno will generally be their go-to. However, anybody can sign up to access high interest and cash back deals.

You won’t need direct deposit or account minimums to sign up for OnJuno. But there’s another condition: You only earn 2.15% on balances up to $5,000 and up to 5% in cash back on spends up to $500 per year. In order to access a higher limit, users will need to drop $9.99 per month on the “Metal Tier” ($30,000 in deposits and $3,000 in cash back).

Interest rate: 2.15% (on up to $5,000 for free or up to $30,000 for $9.99 per month)

4. Yotta

Those of you who follow finance YouTuber Graham Stephan are probably already aware of Yotta Bank, which is arguably the “most fun” neobank on our list. Yotta allows users to win up to $10 million by saving money in a savings account. How? With something called a no-loss lottery.

For every $25 a user deposits (up to $25,000) in Yotta, they receive a ticket in a weekly lottery. You can pick the numbers on your lottery ticket or you can let the computer fill them in for you. Every night, a number is picked by a third-party. The more numbers you match, the more you make.

If you’re lucky enough to ever see your account balloon to over $25,000, you can get a ticket for every $150 you add in Yotta. They will always offer a 0.2% interest rate for all users. However, the luckiest can make up to 3% interest. You can maximize your luck by playing with friends in pools, which gives you more tickets and a greater chance of winning. In mid-2021, Yotta plans to launch a debit card that pays users in lottery tickets when they spend.

Interest rate: 0.2% base rate plus “rewards” (total can vary from 0.5% to 3%)

Bullish Staff

Words from the whole team here at Bullish. We're starting a new conversation about money with the greatest investors and most existing creators.

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