Neighbors Bank is a legitimate online bank, but it operates differently from the brick-and-mortar banks most people know
Neighbors Bank is a real, federally chartered bank based in Indiana. It holds a banking license from the Office of the Comptroller of the Currency (OCC) and is insured by the Federal Deposit Insurance Corporation (FDIC), which means your deposits up to $250,000 are protected by federal insurance. The bank has been operating since 1999 and is owned by Customers Bank, a larger regional bank.
The catch is that Neighbors Bank operates only online—there are no physical branches. You cannot walk into a location to deposit cash or speak to someone in person. All transactions happen through their website, mobile app, or by mail. This is not a scam or a red flag; it is straightforward how the bank does business. Many legitimate banks operate this way, including Ally Bank, Charles Schwab Bank, and others.
The real question is whether Neighbors Bank's products and fees match what you need. That depends on what you are looking for in a checking or savings account.
Key Takeaways
- Neighbors Bank holds a federal banking charter and FDIC insurance, making it a legitimate bank regulated by the U.S. government.
- The bank operates only online with no physical branches, so you cannot deposit cash in person or visit a teller.
- Your deposits are protected up to $250,000 per account type under FDIC insurance, the same protection you get at any bank.
- Before opening an account, compare Neighbors Bank's interest rates and fees to other online banks, because rates change and vary by account type.
How to verify Neighbors Bank's legitimacy yourself
You do not have to take anyone's word for it. You can check Neighbors Bank's federal banking status directly through the OCC's website. Go to the OCC's National Bank Lookup tool and search for "Neighbors Bank." The lookup will show you the bank's charter number, the date it was chartered, and its regulatory status. If it appears in that database, it is a real federally chartered bank.
You can also verify FDIC insurance coverage by searching the FDIC's Bank Find tool. Enter "Neighbors Bank" and your state, and the tool will show you exactly what accounts are covered and up to what dollar amount. This is the same insurance that protects your money at JPMorgan Chase or Bank of America.
If you want to know whether other customers have had problems, check the Consumer Financial Protection Bureau (CFPB) complaint database. Search for "Neighbors Bank" and you will see complaints filed by customers, along with how the bank responded. This gives you a real picture of what issues people have actually experienced, not speculation or rumors.
What Neighbors Bank actually offers
Neighbors Bank offers checking accounts and savings accounts, both with interest rates. The specific rates and fees change, so you should check their website directly rather than relying on information from other sources. The bank does not charge monthly maintenance fees on most accounts, which is a selling point compared to some traditional banks.
The bank does not offer credit cards, loans, or investment accounts. If you need those products, you would have to go elsewhere. Neighbors Bank also does not have ATM partnerships, which means you may pay out-of-network fees if you need to withdraw cash frequently. This is a real limitation if you rely on cash.
Because Neighbors Bank is online-only, you cannot deposit checks by walking into a branch. You can deposit checks by mail or through mobile check deposit if your account type supports it. You also cannot deposit cash directly, which is a significant drawback if you receive cash payments or prefer to work with physical money.
Red flags that are not actually red flags
The fact that Neighbors Bank is online-only worries some people. This is not a red flag. Thousands of people bank with online-only institutions every day, and their money is just as protected as it would be at a bank with branches. The FDIC does not care whether you can walk into a building; it only cares that the bank holds a federal charter.
Another concern people raise is that Neighbors Bank is smaller than Wells Fargo or Bank of America. Size does not determine legitimacy. A small, well-regulated bank is safer than a large bank that is not properly insured. Neighbors Bank's size actually means less bureaucracy and sometimes better customer service.
Some people worry because they have never heard of Neighbors Bank. This is understandable but not a reason to distrust it. Neighbors Bank does not advertise on television or have billboards. It reaches customers through online search and word of mouth. Lack of brand recognition does not mean the bank is not real.
Real risks to consider before opening an account
The main risk with Neighbors Bank is operational, not financial. Because there are no branches and no ATM network, you need to be comfortable managing your money entirely online. If you lose access to your phone or computer, or if the bank's website goes down, you cannot access your money in person. This is rare, but it is a real limitation.
Another risk is that interest rates are low across the entire banking industry right now. Neighbors Bank's rates may be higher than a traditional bank's, but they are still low in absolute terms. If you are saving money, you are not going to earn much interest anywhere. Shop around and compare rates before deciding.
The lack of cash deposit options is a genuine problem if you receive cash regularly or prefer to work with physical money. You cannot deposit cash at Neighbors Bank. You would have to deposit it at another bank first, then transfer it, which adds steps and delays.
How Neighbors Bank compares to other online banks
Neighbors Bank is one of many online banks. Others include Ally Bank, Charles Schwab Bank, Discover Bank, and Capital One 360. All of these are legitimate, FDIC-insured banks. The differences between them are in interest rates, fees, features, and customer service quality.
Some online banks offer higher interest rates on savings accounts. Some have better mobile apps. Some have partnerships with ATM networks that reduce out-of-network fees. Neighbors Bank may be better for some people and worse for others, depending on what matters to you. The fact that it is legitimate does not mean it is the best choice for your situation.
Before opening an account anywhere, make a list of what you actually need: Do you need to deposit cash? Do you need a high interest rate? Do you need customer service by phone? Do you need ATM access? Then compare banks based on those specific needs, not on brand recognition or what your friends use.
What to do if something goes wrong
If you have a problem with Neighbors Bank—a missing deposit, an unauthorized transaction, a fee you believe is wrong—you have the same protections as you would at any bank. You can file a complaint with the CFPB, which investigates and requires the bank to respond. You can also contact your state's banking regulator or the OCC directly.
If the bank fails, your deposits are protected by FDIC insurance up to $250,000 per account type. This has never happened to a major online bank, but the insurance exists specifically for that scenario. Your money is not at risk because the bank is online.
If you believe you are the victim of fraud—someone stole your account information or made unauthorized transactions—report it to Neighbors Bank when ready and then to the Federal Trade Commission (FTC) at IdentityTheft.gov. Do not assume the bank will not help you because it is online. Federal law requires banks to investigate fraud claims regardless of whether they have branches.
Frequently Asked Questions
Is my money safe at Neighbors Bank if the bank goes out of business?
Yes. Your deposits are insured by the FDIC up to $250,000 per account type. If Neighbors Bank failed, the FDIC would transfer your money to another bank or send you a check. This protection applies to every federally chartered bank, online or not.
Can I deposit cash at Neighbors Bank?
No. Neighbors Bank does not accept cash deposits because it has no physical locations. You can deposit checks by mail or through mobile check deposit, but not cash. If you need to deposit cash, you would have to use another bank first.
Does Neighbors Bank have customer service by phone?
Yes, Neighbors Bank has customer service available by phone during business hours. You can also contact them through their website. Response times vary, so check their website for current phone numbers and hours before you call.
What happens if I need to withdraw cash and there is no ATM nearby?
You can transfer money from Neighbors Bank to another bank's account and withdraw it there. You can also request a check by mail, though this takes several days. The lack of ATM access is a real limitation if you withdraw cash frequently.
How do I know if Neighbors Bank is still in business?
Check the OCC's National Bank Lookup tool or the FDIC's Bank Find tool. Both are updated regularly and will show you the bank's current status. You can also visit Neighbors Bank's website directly to see if it is operating normally.