Advertiser Disclosure

What is a Bank Surrogate?

A type of bank that focuses on user-experience and keeps customer deposit with a true FDIC bank. Examples of bank surrogates include PerkStreet, Simple…

A bank surrogate is formed when a company creates a unique, online customer interface for banking but keeps customer deposits with a true depository institution that is insured by the FDIC, like most banks in the country.

Examples of bank surrogates include PerkStreet Financial, SmartyPig, SmarterBank and Simple. None of them are real banks but they offer financial accounts with special perks and features. And customers’ money is FDIC-insured.

The rise of bank surrogates came during the growing unrest against traditional banks, which have been accused of predatory and unfair practices such as raising fees on checking accounts. Customers were feeling nickel and dimed by their banks. Bank surrogates represent a technology-backed push to revamp an outdated way of banking.

Traditional Bank vs Surrogates

While traditional banks charge more fees, slash perks and offer low-interest rates on deposits, bank surrogates are able to provide low-cost (often free) financial accounts with better rewards programs or higher rates -- features made available in part due to the lack of a physical presence, like online banks. Many bank surrogates offer ATM fee reimbursements or partner with ATM networks to offer some level of free ATM access.

Additionally, bank surrogates tend to place more emphasis on the user-experience aspects of everything, including the website design, the online/mobile account interface, the rewards programs (if any) and money management tools.

Find a Surrogate That Fits You

You may find that one of these bank surrogates fits your financial habits more appropriately than your current bank, especially if you are already with an online bank.

Compare Best Accounts Now

Ask a Question

Advertiser Disclosure: Many of the offers appearing on this site are from advertisers from which this website receives compensation for being listed here. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). These offers do not represent all account options available.

Editorial Disclosure: This content is not provided or commissioned by the bank advertiser. Opinions expressed here are author’s alone, not those of the bank advertiser, and have not been reviewed, approved or otherwise endorsed by the bank advertiser. This site may be compensated through the bank advertiser Affiliate Program.

User Generated Content Disclosure: These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.