Getting a regular checking account can be difficult when you have previous problems with banks. In this article, I analyze the best checking accounts from the nation’s largest banks that give you a “second chance.” I review each account’s monthly fees and features before selecting the best overall second chance checking account that’s worth your consideration.
Nearly 10 million American households do not have a regular checking or savings account, according to the FDIC. It is partially due to bad banking history (such as writing bad checks or unpaid overdrafts) that is recorded under someone’s ChexSystems report.
Banks have different ways to address this issue. Most recently, Citibank announced it would 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.
Before I dive into the accounts, here’s a brief refresher on ChexSystems:
A guide to ChexSystems
– In the same way that credit reports track your history with loans and lines of credit, a ChexSystems report records your history with banks accounts, specifically negative activity.
– Common examples of negative activity include constant overdrafts, returned checks, account abuse, check fraud and more. Each record stays on file for five years unless you dispute inaccurate information.
– You can obtain a free ChexSystems report every year from ConsumerDebit.com.
Second chance checking accounts
Of the top 10 banks in the U.S. by deposits, I found that only two of them (Wells Fargo and PNC Bank) provide actual second chance checking accounts. Two other banks (Chase and BB&T) offer prepaid debit card accounts in lieu of second chance checking accounts.
Now, here’s the interesting tidbit. Another three banks (Capital One, Citibank and U.S. Bank) said it won’t deny your checking account application solely based on a negative ChexSystems report. Essentially, you can apply for any 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, I’m only going to focus on the basic checking accounts from these banks.
The following accounts were listed because they are ideal for people with bad ChexSystems reports. The banks may still choose to pull your reports for review.
Here are the accounts from the top 10 banks that I analyzed:
Wells Fargo Opportunity Checking: A second chance checking account that has a $10 monthly fee (add $2 per month for paper statements). The fee is waived in the months that you make 10 debit card purchases, or keep a $2,000 daily balance, or post a total of $750 in direct deposits.
PNC Foundation Checking: A second chance checking account that has a $7 monthly fee (add $2 per month for paper statements). The fee cannot be waived.
Chase Liquid: A prepaid card account with a $4.95 monthly fee. It can be avoided only when linked to a Chase checking account.
BB&T MoneyAccount: A prepaid card account with a $5 monthly fee. The fee drops to $3 if you deposit or load at least $1,000 during the previous month. There’s an additional $3 for paper statements.
Capital One 360 Checking: An online checking account with no monthly fee.
Citibank Basic Checking: A regular checking account that has a $12 monthly fee. It can be avoided with one direct deposit plus one bill payment per month, or with an average $1,500 balance in the checking account or a linked Citibank savings account.
U.S. Bank Easy Checking: A regular checking account with a $6.95 monthly fee (add $2 per month for paper statements). The fee can be waived with total direct deposits of $1,000 or an average balance of $1,500 per month.
WINNER: Capital One 360 Checking
RUNNERS-UP: Chase Liquid and U.S. Bank Easy Checking
With no monthly fee, the Capital One 360 Checking account is just too good of an option for people that have a bad ChexSystems report. You’re getting the same account as someone with a clean ChexSystems report — for no monthly cost. I can’t see how you can do better than that.
I gave honorable mentions to Chase Liquid and U.S. Bank Easy Checking because they are solid choices for anyone who still wants to bank at branches. With Chase Liquid, you are paying the lowest monthly fee of the bunch. With U.S. Bank Easy Checking, I feel that you get the best set of fee-waiver options among the group.
|Account||Monthly fee||Fee waiver|
|Wells Fargo Opportunity Checking||$10 (or $12 with paper statements)||Make 10 debit card purchases, or keep a $2,000 daily balance, or post a total of $750 in direct deposits.|
|PNC Foundation Checking||$7 (or $9 with paper statements)||Cannot be waived.|
|Chase Liquid||$4.95||Cannot be waived.|
|BB&T MoneyAccount||$5 (or $3 with $1,000 load during previous month)||Cannot be waived.|
|Capital One 360 Checking||$0||Not applicable.|
|Citibank Basic Checking||$12||Post 1 direct deposit + 1 bill payment, or keep a $1,500 balance|
|U.S. Bank Easy Checking||$6.95 (or $8.95 with paper statements)||Post total direct deposits of $1,000, or keep a $1,500 balance.|
See how the monthly fees stack up after a year (assuming you didn’t meet the fee waivers):
Wells Fargo Opportunity Checking
All in all, it is everything that you’d expect from any other basic checking accounts except for one thing: you cannot make deposits at an ATM — you must visit a Wells Fargo teller or initiate the deposit electronically. Also, the account can only opened by visiting a branch.
PNC Foundation Checking
This is another regular checking account, but PNC enforces a $100 daily limit on ATM withdrawals and debit card purchases. Looking over the account’s fee schedule, I also found that money orders were only $0.49 each for Foundation Checking customers ($5 for all other accounts). Discounted pricing on money orders is offered because the funds are guaranteed (PNC takes that money out of your account immediately), unlike written checks. Also, the account must be opened at a branch.
Although it is advertised as a prepaid card account, it bears 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.
It’s a prepaid account that lacks check-writing capabilities. And, cardmembers cannot use the ATM to make deposits — you must go to a BB&T teller to conduct deposit transactions. However, you do get to use online bill pay.
Capital One 360 Checking
You can write checks, pay bills online and make person-to-person payments. In addition to free access to all Capital One ATMs, you also get free access to 38,000 ATMs under the Allpoint ATM network. To top it off, your deposits earn interest (see other interest checking accounts out there). The biggest caveat to the account is that you cannot use a Capital One teller to perform transactions. For the perks and no monthly fees, I think it’s a very acceptable tradeoff.
Citibank Basic Checking
A typical basic checking account that lets you write checks, make online bill payments and offers free access to all Citibank branches and ATM.
U.S. Bank Easy Checking
Another typical basic checking account lets you write checks, make online bill payments and offers free access to all U.S. Bank branches and ATM.
WINNER: Capital One 360 Checking
RUNNERS-UP: Citibank Basic Checking and U.S. Bank Easy Checking
When you have deal with a tarnished record in ChexSystems, I’d think that you’d be happy with any checking account. I have such high remarks for Capital One 360 Checking because it offers so much more than a typical checking account.
I gave honorable mentions to Citibank Basic Checking and U.S. Bank Easy Checking because, in the end, you want to closest thing to a checking account. These two accounts are actual checking accounts with great leniency when it comes to bad ChexSystems reports.
|Account||Noteworthy features||Can you write checks?|
|Wells Fargo Opportunity Checking||Cannot make deposits at a Wells Fargo ATM.||Yes.|
|PNC Foundation Checking||Subject to $100 daily limit on ATM withdrawals and debit card purchases. Money orders only cost $0.49 each.||Yes.|
|Chase Liquid||No online bill pay, Chase Quickpay or wire transfers.||No.|
|BB&T MoneyAccount||Cannot make deposits at BB&T ATMs. Online bill pay is available.||No.|
|Capital One 360 Checking||Access to online bill pay and person-to-person transfers. Free access to Capital One and Allpoint ATMs. Deposits earn interest. You cannot use Capital One tellers.||Yes.|
|Citibank Basic Checking||Free access to online bill pay and all Citibank branches and ATMs.||Yes.|
|U.S. Bank Easy Checking||Free access to online bill pay and all U.S. Bank branches and ATMs.||Yes.|
Overall winner: Capital One 360 Checking
Surprise. Surprise. Capital One 360 Checking stands as my choice for the best checking account for people with bad ChexSystems reports. Boasting a long list of beneficial perks with no annual fee, it’s hard to beat.
Add on the fact that Capital One doesn’t rely heavily on ChexSystems and you’ve got a great “second-chance” checking account even though it is not designed for that purpose.
– Online bill pay is the same as check-writing. When you use online bill pay, the bank writes the check and sends it off for you. Technically, if you put a person’s name as a payee, the bank will still send a check to that payee. So, even if you can’t write checks, you can use online bill pay (works with the BB&T MoneyAccount, for instance).
– Ask for an account upgrade after six months. Chase and PNC Bank will allow Liquid and Foundation Checking customers, respectively, to upgrade to a regular checking account if they can show good banking activity in the past six months. If you’ve had an account for that long, it doesn’t hurt to ask.
Other checking accounts that don’t rely on ChexSystems
With more than 7,000 banks in the U.S., there are bound to be more banks out there that are more forgiving of negative marks on ChexSystems reports. Here are some smaller U.S. banks that also provide checking accounts to people with bad banking histories:
- Bank of Arkansas Opportunity Checking
- BBVA Compass Easy Checking
- CenterState Bank Fresh Start Checking
- Fort Sill National Bank (all accounts)
- Great Western Bank
- Peoples Bank (Paris, TX)
- Rio Bank Fresh Start Checking
- Santander Bank (all accounts)
- Urban Trust Bank Opportunity Checking
- USAA Free Checking
- Washington Savings Bank Rewards Card Checking
- Woodforest Bank Second Chance Checking