It can be difficult to get a regular checking account when you have previous issues with banks. Some banks may stop relying heavily on ChexSystems reports to determine if someone is eligible to get a checking account. Other banks offer second chance checking accounts that cater to customers with negative ChexSystems reports.
Of the top 10 banks in the U.S. by deposits, only one of them (Wells Fargo) provides actual second chance checking accounts.
Three other banks (Chase, PNC Bank, BB&T) offer prepaid debit card accounts in lieu of second chance checking accounts.
Essentially, you can apply for an account at one of these banks and your ChexSystems report won’t have a major effect on the account-opening decision unless there is a very obvious case of fraud on your part.
Since it doesn’t make sense for someone with a bad banking history to go for a more expensive checking account, let’s focus on the basic checking accounts from Chase bank.
What is a Checking Account?
A checking account is a type of financial tool that offers everyday access to your money. These accounts typically come with personal checks and a debit card.
And, there’s no limit to how often you can use your money. You can withdraw, transfer, write checks, make debit card charges, and deposit money as often as you’d like.
In recent years banks have expanded their checking account services to include online and mobile banking. With checking accounts, there’s no limit to how often you can access your money.
Unlike savings accounts, you can withdraw, transfer, write checks, and make debit card charges as often as you’d like.
Virtually all banks and credit unions offer checking accounts. To clear checks and transfer funds, banks use Automated Clearing House, or ACH, a nationwide network operated by the two national ACH operators – the Reserve Banks and the Electronic Payments Network.
Checking accounts are typically easy to set up with a small deposit. If they earn interest at all, it tends to be less than savings and money market accounts. But checking accounts offer the same level of safety.
Like savings and money market accounts, checking accounts are insured up to $250,000 by the Federal Deposit Insurance Corp. (FDIC) or by the National Credit Union Share Insurance Fund, depending on whether your account is at a bank or credit union.
Earning interest is another account perk that you might want to add to the list. While some banks offer interest-bearing checking accounts, customers often have to meet certain requirements to earn the highest yield.
You may need to set up direct deposit, enroll in statements, and/or make a certain number of debit card purchases each month. Some banks that offer attractive interest rates, however, require a high average daily balance to qualify.
You might be better off putting your money in a high-yield savings or money market account. Be sure to read all the terms pertaining to a checking account before signing up.
Checking Accounts Fees & Features
A prepaid card account with a $4.95 monthly fee. It can be avoided only when linked to a Chase checking account.
Although it is advertised as a prepaid card account, it bears a great resemblance to Chase’s basic checking account. The account’s fee summary lists out the services that are not available with Chase Liquid.
They include check-writing, online bill pay, Chase QuickPay (person-to-person payments), and wire transfers. As a Chase customer, I can vouch for those great features. Not having access to them would be a major inconvenience.
Chase offers several checking accounts with different sign-up bonuses.
A $200 cash promotion is available through July 20, 2020, to new Chase customers who sign up for Chase Total Checking with direct deposit from an employer or the government for at least six months. N
New customers can also get $100 by opening a Chase College Checking account by July 9, 2020 and completing 10 qualifying transactions.
Chase customers have access to more than 5,000 branches nationwide,16,000 ATMs, and highly rated digital banking tools.
Customers earn a paltry 0.01 percent APY on most accounts. The only exception pertains to “relationship rates” for Chase Premier Savings customers who link that account to a Premier Plus or Sapphire Checking account and meet certain transaction requirements.
The relationship rates are tiered based on the account balance and they are also meager, ranging from 0.02 percent APY for balances up to $49,999 and 0.05 percent APY for balances above $250,000 up to $10 million-plus.
The more elite checking accounts require high minimum balances to avoid a $25 monthly fee. For instance, Chase Premier Plus Checking requires an average daily balance of $15,000 among linked Chase accounts or a Chase first mortgage enrolled in automatic payments.
To dodge the monthly $12 maintenance fee on the Chase Total Checking account, you need a daily balance of $1,500 with a monthly direct deposit of at least $500 or a daily balance of $5,000 among other Chase accounts.
Total Checking customers pay fees for out-of-network ATM transactions and are penalized $34 for overdrafts, though Chase is lenient with occasional offenders.
How Does a Checking Account Differ From a Savings Account?
Savings accounts are for stashing cash for emergencies, large purchases and longer-term goals.
Offer unlimited withdrawals.
Are limited to six withdrawals per month. There are some exceptions.
Offer several methods for spending the money, including debit cards, paper checks, mobile apps and third-party payment services, such as Zelle.
They are less flexible. Many accounts don’t come with check-writing. Some do come with an ATM card, but not all of them.
Often do not pay interest and if they do, the yield is paltry.
Are more likely to be interest-bearing and the yields are better
What to Look for in a Checking Account
Some banks will pay you hundreds of dollars to get you to open a checking account, but these bonuses usually come with strings attached. For instance, Chase will pay $200 to new customers who open a Chase Total Checking account.
But they must set up direct deposit of a paycheck, pension, or Social Security benefit and keep the account open for at least six months. Bankrate can help you find the best bank account sign-up bonuses.
Some banks will offer cash-back rewards, but these can require a sizable minimum balance. One notable exception is Discover Bank, which doesn’t impose balance requirements and pays out 1 percent cash back on up to $3,000 in debit card purchases each month.
Bankrate’s recent survey found that 42 percent of non-interest-bearing accounts don’t charge monthly service fees and impose no balance requirements.
The majority of non-interest accounts will waive fees under certain conditions, such as a direct deposit. Challenger banks, like Chime and Current, also offer no-fee accounts.
Second chance bank accounts are a solid option for people who have had issues previously with their banking institutions.
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