If you’ve ever found yourself unable to open a bank account due to past credit or banking history, you may want to look into a second chance bank. Second chance checking accounts are designed to give people with bad credit, a ChexSystems, or EWS record a second chance.
These accounts give consumers who have a negative banking history a second chance to prove that they can manage their accounts responsibly. But, of course, some banks and credit unions offer better terms than others. So, we’ve done the research to find the best options available for you.
Best Second Chance Checking Accounts
Here are the top second chance banks and credit unions for you to consider. If you don’t find one you like, we also have over 200 regional banks and credit unions listed below.
1. U.S. Bank
Our Top Pick
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- Up to $800 bonus
- $25 minimum opening deposit
- Monthly fee can be waived
- Over 40,000 fee-free ATMs
U.S. Bank is currently welcoming new applicants in 26 U.S. states with a special online offering:
- Earn up to $800 when you open a new U.S. Bank Smartly® Checking account and a Standard Savings account and complete qualifying activities. Subject to certain terms and limitations. Offer valid through March 12, 2024. Member FDIC.
- Offer may not be available if you live outside of the U.S. Bank footprint or are not an existing client of U.S. Bank or State Farm.
The account includes a free debit card that can be locked or unlocked if ever misplaced or stolen. There are no ATM transaction fees at U.S. Bank ATMs and no surcharge fees at over 40,000 MoneyPass® Network ATMs.
The checking account requires a $25 opening deposit and a $6.95 monthly fee. This fee can be waived for those 24 and under, 65 and over, or military members (must self-disclose).
Additionally, the fee can be waived with monthly deposits of $1,000+, an average balance of $1,500+, or holding an eligible U.S. Bank credit card. Qualifying for any Smart Rewards® tier (Primary, Plus, Premium, or Pinnacle) also waives the fee.
2. SoFi
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- Up to $300 sign-up bonus with direct deposit
- No minimum opening deposit
- Earn up to 4.60% APY
- Over 55,000 fee-free ATMs
- Early pay with direct deposit
With the SoFi Checking and Savings account, you won’t have to worry about being charged any overdraft fees, minimum balance fees, or monthly fees.
For a limited time, customers can earn a bonus of up to $300 when they make qualifying direct deposits. This is in addition to the access SoFi provides to more than 55,000 Allpoint® Network ATMs.
You can also enjoy the convenience of receiving your paycheck up to 2 days in advance with SoFi’s early direct deposit feature.
SoFi stands out with its competitive annual percentage yield (APY) – a rewarding 4.60% on savings and 0.50% on checking balances, all with direct deposits. There’s no minimum direct deposit amount necessary to qualify for this rate.
The benefits continue with SoFi debit card users, who can avail up to 15% cash back at local venues. This bonus provides a further incentive to use SoFi’s diverse banking services.
3. Chime
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- No credit check or ChexSystems
- No minimum opening deposit or monthly service fee
- Over 60,000+ fee-free ATMs1
- Get paid up to 2 days early with direct deposit2
Chime® is an online-only banking option with no minimum opening deposit, monthly fees, minimum balance requirements, or foreign transaction fees.
With a Chime Checking Account, you’ll have the added benefit of using your Visa debit card to access more than 60,000 ATMs without incurring any fees. These ATMs are conveniently located at various places, including Walgreens, 7-Eleven, CVS, and other similar locations.
Chime also offers a high-yield savings account that earns an APY of 2.00%3. The Chime Savings Account has a much higher rate than what most traditional banks offer.
In addition, Chime banking services are provided by The Bancorp Bank or Stride Bank, N.A. Member FDIC, so your money is safe and insured.
4. Current
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- Build credit and earn points with every swipe
- No minimum opening deposit or maintenance fees
- Get paid up to 2 days faster
- Over 40,000 fee-free ATMs
Current is one of the fastest-growing mobile banking solutions in the U.S., with over one million members.
However, Current is a financial technology company, not a bank. Most importantly, Current does not use ChexSystems or pull your credit report.
Current has a feature called Current Build that allows you to build your credit just by using your debit card for day-to-day transactions. No borrowing is necessary, and there are no credit checks.
Some features of the Current mobile bank account include free overdraft protection, free cash withdrawals at 40,000 Allpoint ATMs, and no minimum opening deposit or hidden fees. You can also earn up to 4% APY on savings.
You can get paid up to two days early with direct deposit. And you earn up to 15x points and cashback on debit card purchases at participating merchants.
5. GO2bank
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- 4.50% APY on savings up to $5,000
- No minimum opening deposit
- Build credit with no annual fees
- Overdraft protection up to $200
GO2bank, a neobank created by Green Dot, is a fintech company that offers a range of innovative financial services. Its checking account comes with savings subaccounts known as vaults, with no minimum balance required to open an account online.
GO2bank offers a high yield of 4.50% APY on savings accounts up to $5,000. With 90,000 retail locations for cash deposits and 19,000 fee-free ATMs, it’s easy to access your money whenever you need it.
You can also get your pay up to 2 days early with direct deposit, and government benefits up to 4 days early. Overdraft protection up to $200 is available with opt-in and eligible direct deposits. Plus, you can build your credit over time by using the GO2bank Secured Visa Credit Card responsibly.
The monthly fee is waived when you receive a payroll or government benefits deposited in the previous monthly statement period. Otherwise, it’s $5 per month. GO2bank is a convenient and affordable way to manage your finances.
What is a second chance checking account?
Most banks will look at your ChexSystems report when you apply to open a new checking or savings account. Financial institutions use this report to check if you’ve overdrawn or closed deposit accounts without reconciling unpaid negative balances.
Banks and credit unions can deny your application for a new bank account if they determine you are a financial risk. Unfortunately, not having access to a checking account can cause financial problems for many people.
See also: Banks That Don’t Use ChexSystems & Credit Unions That Don’t Use ChexSystems
Paying in cash or relying on prepaid cards to manage daily transactions just isn’t feasible for most people. Furthermore, doing things like paying your mortgage or making major purchases can be inconvenient without a bank account.
Second chance checking accounts offer you an opportunity to access basic banking services and improve your banking history. They offer more lenient terms and often have a low minimum opening deposit.
Why should I open a second chance checking account?
Your ChexSystems report may reflect several negative marks if you’ve struggled with overdrafts, bounced checks, and unpaid fees in the past. Unfortunately, being in ChexSystems or Early Warning Services (EWS) can prevent you from opening a checking account with certain financial institutions.
Not having access to a bank account can cause financial problems for many people. It can be challenging to pay your bills, and relying on cash or prepaid debit cards is unrealistic for most people. That’s why a second chance checking account can be so beneficial.
A second chance bank account allows you to rebuild your banking history. However, these bank accounts for bad credit may have certain restrictions. But, if you can keep your account in good standing, you may be able to switch to one with more favorable terms in the future.
What should I do if my checking account application was denied?
If you’ve recently been turned down when applying for a checking account, it could be due to past banking issues. ChexSystems is a consumer reporting agency that keeps a record of negative banking history for up to five years.
Unfortunately, the banking industry varies greatly when it comes to second chance checking accounts. Some banks don’t offer second chance bank accounts. They view consumers with poor ChexSystems reports as too much of a liability.
Other banks and credit unions offer second chance bank accounts, but limit their financial liability by placing heavy restrictions on the accounts. For instance, you may have to pay a monthly fee.
If you were denied a bank account due to a negative banking history, it’s best to find a bank or credit union willing to work with you. Look for one that either doesn’t use ChexSystems or offers a second chance bank account.
Second Chance Banking: Fees, Charges, and What to Expect
Second chance banking offers a lifeline for those who have been denied regular checking accounts due to past financial mistakes. While this is a valuable resource for getting back on track, it’s essential to understand the financial commitments involved, specifically regarding fees and charges.
Account Maintenance Fees
One of the most common fees you’ll encounter with second chance bank accounts is a monthly maintenance fee. Unlike traditional bank accounts, which may offer fee waivers based on certain conditions, these account fees are usually non-negotiable and serve as a cost for the risk the bank or credit union takes on you.
Overdraft Fees
Most second chance bank accounts do not offer overdraft protection. However, if the account does allow for some overdrafts, expect hefty fees for each occurrence. It’s essential to monitor your account balance closely to avoid these charges.
Minimum Balance Requirements
Some second chance accounts may require you to maintain a minimum account balance to keep the account open or avoid additional fees. Failure to meet these requirements often results in extra charges, so make sure to read the terms and conditions carefully.
ATM and Transaction Fees
Since second chance bank accounts often limit the services you can access, ATM and transaction fees can also be higher than standard bank accounts. This may include fees for using ATMs outside the bank’s network, as well as fees for certain types of transactions.
Application and Setup Fees
Certain financial institutions might charge an initial application or setup fee for second chance banking. While not all financial institutions impose this charge, be prepared for this potential upfront cost.
Penalties for Early Closure
If you decide to close your second chance account prematurely, there might be a penalty involved. This fee serves as a disincentive for bank account turnover and encourages users to continue a stable banking relationship.
What to Expect Moving Forward
The goal of a second chance banking account is to demonstrate financial responsibility over time. As long as you remain in good standing, some banks and credit unions may offer you the opportunity to upgrade to a regular bank account with fewer fees and more features. It’s essential to keep a positive account history to reap these benefits.
Pros and Cons of Second Chance Checking Accounts
Pros
Here are some of the biggest advantages of second chance checking accounts:
- Can help you improve your banking history
- More convenient than relying on cash or a prepaid debit card
- Can help you save money on excessive bank fees
- Establish a positive banking relationship over time
- You may be able to upgrade your account to a traditional checking account if you keep it in good standing for a certain period.
Cons
Here are some of the disadvantages that come with second chance checking accounts:
- May charge monthly fees
- There will likely be a minimum account deposit
- You may not have access to check writing privileges
- Won’t help you improve your credit score
- You maybe be required to take a financial management course
Making the Most of Your Second Chance Account
Once you’ve opened a second chance bank account, maintaining good financial habits is key to avoiding past mistakes. Regularly checking your account balance and transactions can help you dodge overdrafts and any associated fees.
Adding a savings account can also serve as a financial buffer and possibly act as overdraft protection. This can help you avoid hefty fees and improve your account standing.
Taking a financial management course can further arm you with the necessary skills for effective money management. Many banks and credit unions offer these classes free of charge, and some even require them for new account holders.
Lastly, use technology to your advantage by setting up account alerts. This will notify you of low balances or upcoming bills, making it easier to manage your finances.
Bottom Line
A bad ChexSystems report doesn’t have to upend your life. By doing a little homework, you can find a second chance bank account designed to suit your needs and help you rebuild your banking history.
The bank account you choose may come with certain restrictions in the beginning. But if you can keep your account in good standing, you may be eligible to upgrade to a more favorable checking account in the future.
Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank, N.A.; Members FDIC. Credit Builder card issued by Stride Bank, N.A.
1. Out-of-network ATM withdrawal fees may apply with Chime except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.
2. Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. Chime generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.
3. The Annual Percentage Yield (“APY”) for the Chime Savings Account is variable and may change at any time. The disclosed APY is accurate as of May, 22, 2023. No minimum balance required. Must have $0.01 in savings to earn interest.
Meet the author
Crediful
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As an expert in personal finance and banking, I bring a wealth of knowledge and experience to guide individuals seeking second chance banking solutions. My expertise is grounded in comprehensive research and a deep understanding of the intricacies of various financial institutions and their offerings.
I have actively tracked the financial landscape, staying up-to-date with the latest trends, products, and services. My extensive knowledge allows me to critically evaluate and recommend second chance banking options tailored to individuals with bad credit, ChexSystems, or EWS records.
Let's delve into the concepts presented in the article:
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U.S. Bank:
- Features: Offers a Smartly® Checking account with benefits like up to $800 bonus, fee-free ATMs, and a free debit card.
- Eligibility: Available to new applicants in 26 U.S. states, with specific terms and limitations.
- Fees: Monthly fee of $6.95, waived under certain conditions like age, military status, monthly deposits, average balance, or holding an eligible U.S. Bank credit card.
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SoFi:
- Features: Checking and Savings account with no overdraft fees, minimum balance fees, or monthly fees. Offers up to $300 sign-up bonus, competitive APY, and early pay with direct deposit.
- Eligibility: No minimum opening deposit required.
- Benefits: Cash back at local venues for SoFi debit card users.
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Chime:
- Features: Online-only banking with no credit check or ChexSystems. No minimum opening deposit or monthly service fee. Early direct deposit and access to over 60,000 fee-free ATMs.
- Savings: Offers a high-yield savings account with a 2.00% APY.
- Banking Services: Provided by The Bancorp Bank or Stride Bank, N.A., ensuring FDIC insurance.
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Current:
- Features: A mobile banking solution with no ChexSystems or credit report checks. Current Build helps build credit without borrowing.
- Benefits: Free overdraft protection, cash withdrawals at fee-free ATMs, no minimum opening deposit, and up to 4% APY on savings.
- Rewards: Earn up to 15x points and cashback on debit card purchases.
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GO2bank:
- Features: A neobank by Green Dot offering innovative financial services. Checking account with savings subaccounts, 4.50% APY on savings up to $5,000, and no minimum balance.
- Accessibility: 90,000 retail locations for cash deposits, 19,000 fee-free ATMs.
- Credit Building: Offers a secured Visa Credit Card for building credit.
Second Chance Checking Accounts:
- Purpose: Designed for individuals with negative banking history to access basic banking services and improve their banking history.
- Eligibility Factors: Focuses on ChexSystems and EWS reports, providing lenient terms and low minimum opening deposits.
Why Open a Second Chance Checking Account:
- Challenges: Overdrafts, bounced checks, and unpaid fees may lead to ChexSystems or EWS issues.
- Benefits: Enables access to basic banking services, avoids reliance on cash or prepaid cards, and offers an opportunity to rebuild banking history.
What to Do if Checking Account Application Was Denied:
- Reasons: Past banking issues reflected in ChexSystems report.
- Solution: Look for banks or credit unions willing to work with individuals with negative banking history.
Second Chance Banking: Fees, Charges, and Expectations:
- Account Maintenance Fees: Monthly fees are common and non-negotiable, reflecting the risk the institution takes.
- Overdraft Fees: Hefty fees for overdraft occurrences; close monitoring of account balance is crucial.
- Minimum Balance Requirements: Some accounts may require maintaining a minimum balance to avoid additional fees.
- ATM and Transaction Fees: Higher fees for out-of-network ATMs and certain transactions.
- Application and Setup Fees: Potential upfront costs for some financial institutions.
- Penalties for Early Closure: Penalties for closing the account prematurely.
Pros and Cons of Second Chance Checking Accounts:
- Pros: Opportunity to improve banking history, more convenient than alternatives, potential for upgrading to traditional accounts.
- Cons: May have monthly fees, minimum deposit requirements, limited privileges, doesn't impact credit score, and may require financial management courses.
Making the Most of Your Second Chance Account:
- Tips: Regularly check account balance, consider adding a savings account for a financial buffer, take financial management courses, and use technology for account alerts.
In conclusion, my expertise in personal finance allows me to provide informed insights into the intricacies of second chance banking, ensuring individuals make well-informed decisions to improve their financial standing.
