6 Things To Consider Before Choosing A Digital Bank For Your Savings

Digital banks have become a favourite tool for tech-savvy Nigerians who want to save their money at little cost to themselves. These banks are easier to access than traditional financial institutions; customers can access their products and services via apps that grant access to their mobile platform.

CBN License

The Central Bank of Nigeria (CBN) is responsible for issuing operating licenses to banks in Nigeria. Any institution that seeks to provide banking services in the country is legally obliged to get licensed by it. This includes digital-only banks, many of which have sprung up in the past few years.

Before settling for a digital bank, ascertain that they are recognized and licensed by the CBN. This will save you from falling prey to so-called wonder banks– sinister organizations that promise ridiculously high returns on your deposits. These ‘banks’ are seldom registered with the appropriate authorities.

Deposits Insured By The NDIC

When we trust banks with our money, we do so in the hope that they’ll be in business for the long haul. But there’s always a chance that they’ll get hit by a crisis and cease to exist. What if this happens to a digital bank with which you’ve held your money?

Several Products And Services

Much like regular commercial banks, banking FinTechs often offer multiple products and services. Many of them provide account opening, deposits, savings, and access to cash. They may even serve you with tools that help you track and manage your personal finances, and allow you to borrow money.

Some digital banks also let their customers invest their idle funds and earn decent returns. This feature is becoming more common with platforms in this category because it’s something that customers show a preference for.

High Yield On Savings

Most traditional banks provide relatively small yields on savings kept with them. In recent times, those rates have been cut down further by regulators, in the hope that it’ll spur savers to spend and invest their money. But digital banks beat this trend by offering their customers decent interest in their savings– typically much higher than what brick-and-mortar banks provide.

Digital banks are able to deliver higher yields partly because they have lower running costs than traditional banks. They don’t have a lot of physical infrastructures to maintain, or thousands of staff to pay for.

Low Fees

You’ll have more than a few good options to choose from in this respect. But don’t just settle with a FinTech that gives you free things. Go for a platform that serves up the right mix of great products and low service fees.

Security

Traditional banks take several measures to ensure that their customers’ funds and personal information are safe. You should expect the same from digital banks. They’re in possession of much the same sort of customer details as a brick-and-mortar bank and are thus potential targets for hackers and other malicious actors.

Your digital bank should guarantee strong protections for personal accounts. These may include ID document verification, password, PINs, biometrics, card control, and transaction alerts. Accounts should be encrypted to a degree that’s the same as (or similar to) what’s expected of regular banks.

Final Words

If you would like to begin using digital banks, there are several of them that you can choose from. But don’t make a decision until you’ve evaluated the options. Weigh them all by the criteria we’ve talked about here, and select one that meets your specific banking needs.