Spencer Tierney
speaker
50 appearances
1 recordings
1 series
first heard Nov 2024
last heard Nov 2024
Spencer Tierney’s voice in public audio — every appearance, attributed to the second.
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Appearances
For starters, the clearest way through this very murky area of banking is to know a bank from a non-bank. The words FDIC insured account don't automatically mean your money back guaranteed in this day and age.
Since I research online banks and neobanks all the time, let's make this an interactive activity where you, Sarah and Sean, will go to a financial institution's website and interpret the fine print to figure out whether it's a bank or not a bank. Are you ready? Let's do it.
Okay, I do love a field trip, Spencer, especially one as nerdy as exploring the fine print of a neobank.
Cracking my knuckles, getting ready here. Let's take the listener's bank as an example, UFB Direct. On the website's homepage, are there any signs to indicate this is a bank?
Okay.
I'm also seeing that it says deposits FDIC insured in the middle of the page. And there's a big banner on the page touting their FDIC coverage with a picture of a dollar sign on a shield. So they really want you to know that they are protecting your money. They got the symbolism there.
Yeah. So the middle of the page is a little unique for this institution. But yes, the bottom of this website, Sarah, that is where you usually go as your typical starting location for where the fine print will almost certainly list a bank name and FDIC information. It is confusing because UFB Direct is not the name of the bank that's the member FDIC. So do you think it's a bank?
I'm a solid maybe. So let's see. It says for more information, read our FDIC notice. Good idea. Clicking that.
And here we are, another website. We are at Axos Bank, which we've heard mentioned a few times. It says, Axos Bank is backed by the Federal Deposit Insurance Corporation, which guarantees the safety of deposits in member banks, yada, yada, yada. Currently, the banking brands operated by Axos Bank include UFB Direct. So I think that UFB is a bank. You'd be correct, Sean.
Banks can have multiple brands or divisions, and they all have FDIC insurance. Another place that can be useful to check for is an About Us page. In UFB Direct's case, there's a small link to About Us on the bottom of the homepage. When you click on that, you'll go to a page that says UFB Direct, a division of Axios Bank.
I'm going to be honest with you, Spencer. I was not 100% confident in my answer there, as you could maybe tell. So how else can people vet if an institution they want to put their money into is actually FDIC insured or not?
If you have anxiety about this type of stuff like me and don't want to trust the institution's website alone, check out the FDIC.gov's data tool called BankFind. This online directory can help you find FDIC-insured institutions, but I will be the first to admit it's not the easiest tool to use. You won't find banks like UFB Direct because only parent banks are listed, not divisions.
And a bank might have a more official name than you're used to calling it. Chase Bank, for example, shows up in this tool as JPMorgan Chase Bank, National Association. There are multiple banks with the same name out there as well. But what you can do is type in the bank name as best as you can and then search the listings for the primary website provided and confirm it's the bank website you use.
or in the case of bank divisions, confirm the parent bank's website. And last tip from me, if you see the word direct in the name of a financial institution like UFB Direct, Popular Direct, or Brio Direct, it's a good indicator that it's a bank because direct bank is an industry term for an online bank.
Okay, that is all good to know. So for the sake of our listener Jocelyn's question, this would mean that the funds that they have in their UFB savings account are FDIC insured. So Jocelyn, good news.
Reading the website's fine print is, again, the answer. You'll typically see text such as, institution name is a financial technology company, not a bank. Banking services provided by. And then you see a bank name, usually followed by member FDIC.
Sure. Let's get nerdy. So I'm there. And what I'm seeing is right at the top, it says the number one most loved banking app. But then scrolling, looking for fine print, lots of nice modern graphic millennial oriented images. Let's see. Let's see. Wow. So many images here. Then at the bottom, it says Chime is a financial technology company, not a bank. Banking services are provided by
the Bancorp Bank NA or Stride Bank NA members FDIC. So you're getting mixed messaging here. It says the number one most loved banking app, but then it says it's not a bank. With this mixed messaging, I can see why people would have a really hard time parsing between a neobank and an online bank.
I'd say be aware of the risks of a neobank, but also prioritize what you need in your banking. Neobanks can be a lifeline for some people, especially low-income folks and others who might have a hard time at traditional banks. Banks can hit you with monthly maintenance and overdraft fees for not having enough money and ultimately kick you out.
Neobanks, however, are easy to sign up for and use, and many of their accounts don't have mandatory fees. They're also early adopters of new banking technology. Sometimes new banks have features such as early direct deposits or no fee overdraft services that are available years sometimes before online or traditional banks adopt them.
Showing 21–40 of 50 · page 2 of 3
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