I thought about trying one called Envelope Money. Which is one designed around budgeting. I just have never used an online bank before, and I’ve heard horror stories about Chime. Where they’ll hold funds indefinitely.
Is your money truly safe with a Fintech banks?
byu/RAM-I-T inpersonalfinance
Posted by RAM-I-T
2 Comments
Fintechs are basically just front ends for “real” banks. The partner bank is the one holding your money, and they should be FDIC insured.
Just because your money is safe doesn’t mean all fintechs are a good idea, though. I’ve read a lot of complaints about Chime, for example, freezing accounts.
Your title is misleading. A fintech bank is still a real bank. Back when banks started trying out internet banking in addition to telephone and mail-in banking, they were technically “fintech banks.” Now we just call them online banks.
But you probably meant fintech companies that aren’t banks but offer banking services via contracted banks? It depends on what regulations and standards the company itself is beholden to. Your account data is only as safe as how well they are kept, and most companies aren’t going to go the extra mile than they are forced to. I would trust a real brokerage that contracts to banks than an unregulated company. At least the brokerage is beholden to SEC/SIPC/FINRA to keep your account data safe.