What Is a Neobank?
A neobank (neobanque in French) is a financial player born in the mobile era, offering banking services 100% through a smartphone app. Unlike traditional online banks (such as Boursorama or Fortuneo), neobanks are not always licensed credit institutions: many operate under the status of payment institution or electronic money institution.
This distinction matters because a payment institution cannot, in principle, offer credit or regulated savings accounts (such as the Livret A or LDDS, France's government-guaranteed tax-free savings accounts). However, neobanks have gradually expanded their offerings by obtaining full banking licences.
Neobank vs Online Bank: The Difference
| Criterion | Online Bank | Neobank |
|---|---|---|
| Status | Licensed credit institution | Varies (payment, credit, electronic money) |
| Parent company | Major banking group | Startup / Fintech |
| Product range | Full (credit, savings, investing) | Limited (payments, foreign exchange) |
| Deposit guarantee | 100,000 euros (FGDR -- France's deposit guarantee scheme) | Varies (depends on status and country) |
| Track record | 15-25 years | 5-12 years |
The Main Neobanks in France
Revolut
- Origin: United Kingdom (2015), European banking licence since 2024
- Customers: over 40 million worldwide, approximately 4 million in France
- Free plan: account + Mastercard, foreign currency payments at interbank rate (up to 1,000 euros/month)
- Premium plan: 9.99 euros/month (insurance, unlimited exchange, cashback)
- Strengths: best-in-class foreign exchange rates, crypto, fractional share investing, savings vaults
Example: a traveller spending 3,000 euros per year in foreign currencies saves approximately 60 to 90 euros in exchange fees compared to a standard bank card (2-3% commission).
N26
- Origin: Germany (2013), full banking licence since 2016
- Customers: approximately 8 million across Europe
- Free plan: account + virtual Mastercard, 3 free withdrawals/month
- Metal plan: 16.90 euros/month (0.1% cashback, insurance, partner perks)
- Strengths: clean interface, automatic categorisation, Spaces (virtual sub-accounts)
Lydia (now Sumeria)
- Origin: France (2013)
- Customers: approximately 7 million users
- Free plan: account + card, instant peer-to-peer payments
- Paid plan: from 9.90 euros/month (cashback, insurance)
- Strengths: peer-to-peer payments, money pools, intuitive interface, French IBAN
Trade Republic
- Origin: Germany (2019), banking licence
- Positioning: investment-focused neobank
- Interest-bearing account: 2.75% on cash balance (up to 50,000 euros)
- Investing: shares, ETFs, bonds, crypto with 1 euro commission per order
- Investment plans: free automated DCA on over 2,000 ETFs and shares
Advantages of Neobanks
Superior User Experience
Neobanks were designed mobile-first. Their apps are generally more intuitive, faster, and more modern than those of traditional or online banks. Account opening takes 5 to 10 minutes, with real-time notifications and instant card management.
Unbeatable Foreign Exchange Fees
This is the historical battleground of neobanks. Revolut and N26 offer the interbank exchange rate with no markup (within certain limits), whereas traditional banks apply a commission of 1.5 to 3%.
For a 500 euro spend in US dollars:
- Traditional bank (2% commission): cost of 10 euros
- Revolut (free): cost of 0 euros
Innovative Features
- Sub-accounts (N26 Spaces, Revolut Vaults) to organise your budget
- Round-up savings: each payment is rounded up and the difference is saved
- Disposable virtual cards for secure online purchases
- Cryptocurrencies integrated (Revolut, Trade Republic)
Limitations of Neobanks
Deposit Guarantee
Funds deposited in a neobank are not always covered by the French FGDR (Fonds de Garantie des Depots et de Resolution) up to 100,000 euros. It depends on the institution's status and country of licence:
- N26: German banking licence, funds guaranteed up to 100,000 euros by the German guarantee fund
- Revolut: Lithuanian banking licence, guarantee of 100,000 euros by the Lithuanian fund
- Lydia/Sumeria: payment institution, funds are segregated but not covered by the FGDR
Incomplete Service Range
Most neobanks do not offer:
- Mortgages
- Livret A / LDDS (unless they hold a full banking licence)
- Traditional PEA (France's equity savings plan)
- Chequebooks
- Authorised overdraft (or very limited)
Customer Support Could Be Better
Neobanks are regularly criticised for their customer service:
- Support primarily via chat or email
- No easily accessible phone number (Revolut)
- Response times can exceed 48 hours in case of disputes
How to Use Neobanks Wisely
The best approach is to treat neobanks as a supplement, not a replacement:
- Primary bank: Boursorama or Fortuneo for your current account, savings, and investments
- Travel neobank: Revolut for foreign currency spending (zero exchange fees)
- Investment neobank: Trade Republic for automated DCA and an interest-bearing cash account
- Social neobank: Lydia/Sumeria for peer-to-peer payments and money pools
Typical Monthly Setup -- Multi-Bank
| Account | Use | Cost |
|---|---|---|
| Boursorama (Ultim) | Primary account, savings | 0 euros |
| Revolut (free) | Travel, foreign exchange | 0 euros |
| Trade Republic | Monthly ETF DCA | 1 euro/order |
| Total | 1 euro/month |
Conclusion
Neobanks have revolutionised mobile banking and international payments. In 2026, they are an excellent complement to a primary online bank. Revolut excels for travellers, Trade Republic for investors, and Lydia/Sumeria for social payments. However, keep your traditional online bank for savings, credit, and deposit security.