No doubt having a bank account makes your life easier. It makes it easy to pay bills, track spending, make deposits, get loans, write checks, have your employer pay you via direct deposit, and the list goes on.
But with monthly service charges for many that can’t meet the minimum balance requirements, many are leaving traditional banks for those with no minimum balance and no monthly fees, saving you up to $300 a year. Let’s explore some free online banking options.
It’s possible to open a bank account for no cost at all
Due to the high cost, unbanked or underbanked households often say they don’t have a bank account. A 2019 FDIC study shows that 29% of unbanked households say they “don’t have enough money to meet minimum balance requirements.”
However, you don’t need much money to open your bank account. Opening a bank account can even do it for no cost at all.
Banks don’t usually charge any fee to open a new checking account. But some require a minimum balance, which is where the cost comes in. The minimum amount can be as low as $0 and as high as hundreds of dollars. Some banks even offer promotions for opening a new account.
READ MORE: Here are the six best options for online banking with free accounts
If you need a bank account
Look for a basic account with no minimum balance and no monthly fee. While you may not find one at a local bank branch, there are plenty of options online through:
- Discover
- Capital One
- Axos Bank
- Ally Bank
- Chime
- Varo
- eTrade
If you need a money market account or certificate of deposit, you’ll be expected to start with a higher minimum deposit.
Consider a local credit union
Credit unions are nonprofit cooperatives that members collectively own. Profits are usually returned to members by lower fees and higher savings rates.
You’ll need to meet specific eligibility requirements to join a credit union. Eligibility requirements can include working for the same employer, living, or worshiping at a particular location.
Check with your local credit unions. If you qualify to join, you can usually find accounts with lower requirements than a traditional bank account.
READ MORE: What happens if you close your bank account and default on a payday loan?
Avoid these accounts
Rule out any bank accounts that tack on these two costs:
Minimum deposit requirements
The key is to look for a bank account with a low minimum deposit requirement and no minimum balance to maintain. You don’t want to have to pay a costly fee if you need to dip into your emergency savings to cover a sudden expense.
Monthly service fees
Many banks charge customers a monthly maintenance fee simply for having an account. These can range from $4 to $25 and add up quickly. Even the lowball $4/month fee costs almost $50 a year.
Look for banks that either don’t charge the fee at all or for ways to have the fee waived, including setting up direct deposit.
READ MORE: Six best bank accounts if you have bad credit
What you need to open a new account
- A valid, government-issued photo ID, including a driver’s license or a passport. A state ID card is available through the Department of Motor Vehicles if you don’t drive.
- Your birthdate, Social Security number, or Taxpayer Identification Number
You may also need:
- Identification details for other applicants if the account is a joint one
- An account co-owner if you’re under the age of 18. You’ll need a parent or legal guardian to sign legal documents.
Want to know more about how to open a new bank account? Check out this video:
The bottom line
While banking is a necessary evil we need to function in our daily lives, many people with bad credit could not get a checking account in the past. They were forced to stand in line at a payday or check cashing service while paying hefty fees.
Now with the advent of these fintech companies offering accounts with similar services and perks much like the big traditional banks, there are other options for people with less than stellar credit who don’t want to pay the hefty monthly fees and crippling overdraft fees. All you need is a computer, tablet, or smartphone.
FAQs
Chime: Chime is probably the easiest to join. The application is very simple.
TD Bank: Users can enter their basic information to sign up with TD, including a driver’s license number or state ID.
United Bank: United Bank has the exact requirements as TD Bank and needs $50 as a starting deposit.
Synchrony Bank: Synchrony requires a $100 deposit.
Chase Bank: You need two forms of ID and a utility bill, and You must fund the account within 60 days of opening it. To open a joint account, you must apply in person.
Axos Bank: Axos requires a $250 opening deposit.
Ally: Ally asks for no opening deposit.
Wells Fargo: The bank requires a $25 deposit.
Yes, individuals can open a joint account with anyone. Most often, however, joint checking accounts are opened between partners or family members, but any two people can open one together. You can even open a joint bank account with three people, four people, five people, or even more. For checking accounts, each account holder will have a debit card that will allow them to make purchases and withdraw cash at ATMs.
Capital One is one of the most innovative of the traditional banks.
Bank of America Safe Balance Checking Account has a $4.95 monthly fee, but you can’t write personal checks.
Wells Fargo Clear Access has a $5 monthly fee.
Go Bank account has an $8.95 monthly fee. The monthly fee is waived if you have a direct deposit of more than $500 within the month. There’s a fee of up to $4.95 each time you deposit cash.
Chime is one of the most feature-rich accounts available. Paper checks are available through online bill pay with Chime.
Then there are the more well-known standard fintech companies such as Varo, Dave, Albert, Acorns, MoneyLion, etc.
