Lili Bank – Banking for Freelancers

Being a freelancer is tough. (Believe me, I’ve been doing it for over a decade now.) It’s a constant struggle between getting enough work to live on and juggling multiple deadlines at once. But, once you get the hang of it, the benefits are worth it.
There’s just one thing I wish I could change about the freelance life: taxes. Freelancers are required to jump through hoops when it comes to paying taxes. Because we’re all 1099 workers, it’s up to us to decide just how much of our hard-earned money goes back to Uncle Sam. So, when I heard about Lili’s Tax Bucket feature, I downloaded the app and opened an account.
Here’s how life as a Lili customer is working out so far.

What is Lili?

In 2018, Lilac Bar David and Liran Zelkha decided to create an online banking solution designed with freelancers and small business owners in mind. (Think: early direct deposit, an optional tax bucket, and fee-free cash withdrawals.) After the group raised $25 million, Lili was born.
Lili is a free, mobile-based banking app — available for both iOS and Android devices — that offers tax planning and budgeting tools to help freelancers and independent contractors manage their finances.

How does Lili work?

Let’s start with the basics. Lili isn’t a bank, it’s a mobile banking app. Lili’s banking services are provided by Choice Financial Group and deposits on all accounts are insured up to $250,000 by the Federal Deposit Insurance Corp.
Opening a new account with Lili is easy, but you’ll need to download the mobile app to do so. If you decide to use Lili’s desktop site, you’ll eventually be prompted to download the app and pair your device. To make things easier, just download the app and skip the desktop site. (Lili members cannot bank via the desktop site, which for me, is a huge bummer.)
Lili
You’ll also need to be a freelancer or independent contractor/small business owner to use Lili; all non-freelancers are asked to search elsewhere for their banking needs.
Lili2
Once you’re in the app, you can start and complete an application. You’ll be asked to provide your email address, full name, phone number, date of birth, social security number, and mailing address. Lili will also ask you to choose what type of freelancer or independent contractor you are from a dropdown menu.
Within a few minutes, you’ll have a brand-new bank account. It may take up to two weeks for your Lili Visa Debit Card to arrive, but the Lili app provides its users with a digital card, too. (So, you won’t be stranded and penniless!)
Using the app, you can:
  • Fund your account
  • Access account and routing numbers
  • Pay bills
  • Review transaction history
  • Generate expense reports
  • Find local ATMs
  • Modify debit card usage settings
  • Categorize transactions
  • Set-up direct deposit (ACH transfers or mobile check deposit)
  • Link to external bank accounts
  • Link to external platforms (Venmo, PayPal, Cash App, Apple Pay, etc.)
Once your physical card arrives, you’ll need to activate it before you can use it.
If you’re operating under a DBA or “doing business as” or a single-member LLC (using your social security number instead of an EIN), you can add your business name to your Lili bank account. You’ll just need to provide Lili with your tax return, business license, or fictitious name registration. Once everything is verified, you’ll be able to accept payments and check deposits using your business name.

How much does Lili cost?

Lili is a fee-free online banking service, which means there are no monthly fees, no minimum opening deposit, and no minimum balance requirements — no matter how low your balance is.
With Lili, you’ll never be expected to pay:
  • Overdraft fees
  • Inactive account fee
  • Stop payment fee
  • Deposit item returned fee
  • Funds transfer fee
  • Returned item fee
Lili’s (avoidable) account fees include:
  • Express mail fee, $20
  • Card replacement fee, $5 following the first replacement
  • Deposited check return fee, $25
  • Out-of-network ATM fee, $2.50
  • International ATM fee, $5

Lili features

Lili may not offer a business credit card or any of the other fancy products that the competing business banking services offer, but Lili shines where it counts. Here are a few of Lili’s best features.

No ATM fees

Lili isn’t a traditional bank, so you’re probably wondering how cash deposits and ATM access works. (I know I did!) With Lili, customers can withdraw cash fee-free via an in-network ATM. There are more than 32,000 MoneyPass ATMs in the US. If you’re having trouble finding an ATM, the Lili mobile app has a built-in locator to help you out.
Lili members can deposit cash at any one of the 90,000 participating Green Dot locations. Lili does not charge any fees for cash deposits, however, the Green Dot retailer itself may charge a fee of up to $4.95 per deposit.
Note: Lili bank members are limited to making deposits of $1,000 in a 24-hour window and are maxed out at $9,000 per month.

Expense management tools

The Lili app provides several built-in tools to help members manage their expenses and plan for taxes. For example, you can categorize your spending by swiping left for “life” (aka personal expenses) and swiping right for “work” (or business expenses).
Each time you use your card or make a purchase using your Lili account, you’ll receive a notification on your smartphone with a little note that says something like: “You just spent $10 at ‘Starbucks.’ Is this a work expense?” (Of course, the place and amount will be different, but you get the picture.) Then all you have to do is click the notification and categorize the expense. Lili will do the rest!
The Lili app also gives you the option to:
  • Add receipts to transactions
  • Download quarterly and annual expense reports
  • Track spending in real-time
  • Automatically save a percentage of funds using the freelancer-friendly Tax Bucket feature
  • Open an Emergency Bucket (savings account for emergencies)
In addition to the app’s built-in tools, the Lili website offers resources and how-to guides for every kind of worker, from freelance writers to artists to subcontractors.

Automatic savings

Lili reeled me in with its auto-savings features. Lili has two automatic savings options:
Tax Bucket. The Tax Bucket feature gives you the option to set aside a percentage (you can change this at any time) of your income into your Tax Bucket. To help you decide, Lili will ask you to choose your profession and answer a few simple questions. If you’re unhappy or disagree with the percentage, you can change it.
Emergency Bucket. Saving for taxes is hard, but saving for emergencies is even harder. Why? Because once you’ve done the responsible thing and set aside money for Uncle Sam, sometimes, there isn’t much left over for you (which can make saving on top of saving difficult). With Lili’s Emergency Bucket you can set aside a fixed daily amount to go into your Emergency Bucket. And, don’t worry: you can pull this money out at any time.

Who is Lili best for?

Small business owners

Lili is advertised as a checking account for freelancers, but business owners can benefit from its features too—especially if you have a newly-founded startup.

Freelancers and independent contractors

Lili is great for seasoned and newbie freelancers alike. Lili has expense tracking and reporting built right into its app for easy access. You can also set money aside for taxes and emergencies to ensure you’re covered, no matter what happens.

Who shouldn’t use Lili?

People who prefer a brick-and-mortar

If you’re fond of traditional banks, Lili isn’t for you. In addition, anyone who is not a freelancer, independent contractor, or small business owner should not open a Lili account. Or, if you’re a freelancer who’s interested in getting a business bank account that provides additional resources or information on credit cards or increasing your credit score, you may consider opening a Credit Karma Money account.

Pros & cons

Pros
  • Easy to get started. Opening a new account with Lili is quick and simple. According to the site, it’ll only take you three minutes.
  • Security. Lili asks for a verification code each time you log in.
  • No fees. Lili doesn’t charge a monthly service fee or charge for in-network ATM withdrawals.
  • Early direct deposit. With Lili, you can get paid up to two days earlier with an early direct deposit.
  • Real-time spending notifications. The Lili app will send you a push notification whenever you make a purchase, pay a bill, or receive a payment.
  • Expense tracking. Why pay for QuickBooks when Lili offers expense tracking for free?
  • Automatic savings. Lili gives you the option to put your savings on auto-pilot with its Tax Bucket feature and its Emergency Bucket feature.
  • Mobile deposit. Lili members can deposit paper checks via the app by taking a photo of the check and uploading it.
  • Cash deposit at any Green Dot location. There are 90,000 Green Dot locations in the US. Some retailers include RiteAid, CVS, and Walmart.
  • Mobile payments. If you forget your wallet at home, you can use the Lili app to pay for things.
  • Fee-free cash withdrawals. With Lili, you can make free cash withdrawals from more than 32,000 ATMs across the US. The Lili app also includes a built-in ATM locator.
  • Referral program. Lili will give you $50 for referring your freelancer friends to use the app.
  • Lili Creators program. Lili also has an influencer program called Lili Creators. According to the site, Lili will pay you every time one of your followers opens an account.
Cons
  • Mobile-only banking. Lili is a mobile-only bank, which means you can’t use the desktop site to access your account.
  • Bank transfer limits. Lili won’t allow you to transfer more than $200 per day or $1,000 per month from another bank into your Lili account.
  • Bank transfer time. When you transfer money into an external account, it takes up to five business days to process.
  • The mobile check deposit is wonky. The mobile check deposit option isn’t the most user-friendly feature of the app. You also have to make sure the photo is just right and that each check you deposit has the words “for Lili mobile deposit only” on the back of the check.
  • No interest or rewards. Lili doesn’t pay interest on deposited funds and there are no cashback rewards programs for the Lili visa debit card.

Lili vs Novo vs NorthOne

BankMinimum depositMin balance requirementATM feesAccount types
Lili$0$0$2.50 for out-of-network; $5 for internationalchecking
Novo$50$0$0business checking
NorthOne$50$0$0business checking

Novo

Novo is an online banking service that offers customers the option to open a business checking account. Unlike Lili, Novo customers can use the browser version of the site or the app to do their business. There are no monthly fees or minimum balance requirements, but Novo does require a $50 minimum deposit to open a new account. Small business owners and freelancers can snag discounts on services such as Stripe and QuickBooks with Novo.

NorthOne

NorthOne offers customers the option to open a business checking account for $10 per month. There’s also a minimum deposit requirement of $50. Although NorthOne is great for freelancers and small business owners alike, its pricing structure is a bit of a downfall. NorthOne charges overdraft fees ($5), non-sufficient funds (NSF) fees ($25), wire transfer fees ($10), and international wire transfer fees ($25).

FAQs

Is Lili a good bank?
The term “good” is subjective, but if you’re a freelancer or independent contractor who’s looking for a fee-free checking account option, Lili could be a good choice as Lili is a no-fee online banking service that offers free expense and tax reporting tools.
Which bank owns Lili?
Lili’s banking services are provided by Choice Financial Group and deposits on all accounts are FDIC insured up to $250,000.
How does Lili bank make money?
According to Bar David, Lili only makes money from card processing fees.

The bottom line

Lili is a great banking option for independent contractors, freelancers, and new small business owners. With Lili, you can track expenses, save for taxes (or other emergencies), and get paid earlier with an early direct deposit. There are no account fees associated with Lili and no minimum balance requirement. (Yes, even if you have $0 to your name.)
The only downfall to Lili, in my opinion, is that you cannot access your account using a desktop or laptop. (This may change in the future, though!) Depositing checks via mobile can be a pain, but overall Lili is a solid banking choice.

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