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Fintech vs bank: who holds the money

How to read 'Banking services provided by,' what that bank is for, and what FDIC insurance does not cover.

Last reviewed Oct 30, 2026. Written by New Bank Account.

A bank is chartered to hold deposits. A fintech builds the app, the cards, and the screens. Many fintech accounts add a sentence like "Banking services provided by" and then name a bank. That sentence is the one to read. Everything else in the ad is marketing.

What the sentence is telling you

The named bank, not the app company, is usually where the deposit sits. The fintech is not the bank unless its own site says it is a bank. On our reviews we quote that sentence instead of rewriting it. If you are comparing business accounts for a startup or a store, the review sets are startups and ecommerce.

What to check next

  • The exact legal name of the bank in the sentence
  • Whether that bank is an FDIC member (FDIC deposit insurance)
  • Whether the fintech says deposits are placed at more than one bank, and how
  • What the account agreement says happens to your balance if the app company shuts down

There is no universal rule for the shutdown case that we are willing to print. The agreement you accepted is the document. Read the section on the program bank before you park payroll there.

FDIC insurance is not a logo

FDIC insurance applies to deposits at an insured bank. The FDIC's published standard maximum is $250,000 per depositor, per insured bank, for each ownership category (understanding deposit insurance). It depends on how the account is held. It does not cover stocks, crypto, or other investments a company might offer next to the account.

Two extra checks for a fintech:

  1. The deposits have to actually be placed at the insured bank.
  2. Balances in the same ownership category at that same bank are added together, including money you hold there outside the app.

The longer explanation is how FDIC insurance works.

How we treat it on this site

If we have copied the provider's sentence, the account card shows it. If we have not, the card says Fintech and leaves the partner bank blank. We do not guess. A blank is safer than a confident wrong bank.

Questions people ask

Is a fintech a bank?
Only if it is chartered as one. Most fintech accounts name a separate bank in a sentence like 'Banking services provided by.' That bank, not the app, is usually where the deposit sits.
Does 'FDIC insured' on an app mean every dollar is covered?
It means deposits at an insured bank can be covered up to the FDIC's published limit, if they are held in a way that qualifies. The limit is $250,000 per depositor, per insured bank, per ownership category. Investments sold next to the account are not deposits.
What if the app company shuts down?
The account agreement is the document that describes what happens to the deposit. Read it. Do not rely on a general rule from a review site.
Why does New Bank Account sometimes say only 'Fintech'?
Because we have not copied the provider's partner-bank sentence yet. We do not guess the bank's name.

Sources

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