Digital-only bank.

In plain English

A digital-only bank delivers accounts, payments, and lending entirely through apps and websites instead of physical branches, with no counter anywhere to walk into. Some hold their own banking charter and are supervised directly by a banking regulator. Others are technology companies whose customer deposits sit at a chartered partner bank, which is where insurance actually attaches. Lower fixed costs let these firms pay higher deposit rates and charge fewer maintenance fees. The tradeoff is no counter to walk into, cash handling that depends on partner networks, and support that is only as good as the chat queue behind it.

01Why it matters

The rate advantage is real, and so is the difference between an account at a chartered bank and an account at a technology company using one, because the second decides who you escalate to when a balance is wrong.

02The math, step by step

Say a branch bank pays 0.4 percent on savings while a digital bank pays 4 percent. On 20,000 dollars that is 80 dollars a year against 800 dollars, a 720 dollar difference for holding the same cash in a different place.

Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.

03What this is NOT

04Receipts

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