We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.
So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners.
Why Some Households Don’t Use Banks — and Why They Should Reconsider
Tony Armstrong leads the banking team at NerdWallet. He has covered personal finance for nearly a decade. Tony began his NerdWallet career as a writer and worked his way up to assistant assigning editor and then to lead assigning editor. His writing has been featured by the Los Angeles Times, MarketWatch, Mashable, Nasdaq.com, USA Today and VentureBeat. Tony lives in Minneapolis, Minnesota.
Erica Harrington manages the copy desk at NerdWallet. She has more than 20 years of copy-editing experience, including at the Chicago Tribune and CNN Digital. At those outlets, she edited content including business, city and state politics, arts and entertainment, and national and international affairs. Erica also has taught English as a second language at corporations in Santiago, Chile. She has produced white papers for the United Nations. She is based in Atlanta.
Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
You’re following Tony Armstrong Visit your My NerdWallet Settings page to see all the writers you're following.
Discover the bank accounts that fit your financial goals
Just answer a few questions to compare bank accounts that meet your needs.
Banks and credit unions offer many services that save people time and money, but these conveniences elude 8.6 million unbanked households in the United States. Instead, these families rely on alternative financial service providers for basic transactions such as check cashing, which often come with hefty fees.
Unbanked households, which the Federal Deposit Insurance Corp. defines as those that don’t have an account at an insured institution, also miss out on helpful tools and services such as savings accounts, secured credit cards and deposit insurance.
Whether they don't have a bank account by choice or circumstance, these people could save money and time by joining, or rejoining, the banking ecosystem. The reasons for not having an account vary, but each can be overcome.
They think they don’t have enough money
The main reason people don’t belong to a bank is that they think they don’t have enough money to maintain an account or meet a minimum balance requirement, according to an FDIC study.
But it doesn’t always take a certain dollar amount to qualify for a bank account; many of NerdWallet’s favorite checking accounts don’t have initial deposit requirements. They also don’t have monthly maintenance charges, which means customers don’t have to keep their balances above a certain amount to avoid a fee.
4.50%SoFi members with direct deposit activity can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum direct deposit amount required to qualify for the 4.50% APY for savings. SoFi members with Qualifying Deposits can earn 4.50% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that are equal to or greater than $5,000 every 30 days. Members without either Direct Deposit or Qualifying Deposits will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 8/2/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
These cash accounts combine services and features similar to checking, savings and/or investment accounts in one product. Cash management accounts are typically offered by non-bank financial institutions.
These cash accounts combine services and features similar to checking, savings and/or investment accounts in one product. Cash management accounts are typically offered by non-bank financial institutions.
5.50%*Base annual percentage yield (variable) is 4.75% as of 7/31/23. 5.50% APY reflects a .75% boost available as a special offer with qualifying deposit. Terms apply. Cash Reserve is only available to clients of Betterment LLC, which is not a bank, and cash transfers to program banks are conducted through clients’ brokerage accounts at Betterment Securities.
Min. balance for APY
$0
CDs (certificates of deposit) are a type of savings account with a fixed rate and term, and usually have higher interest rates than regular savings accounts.
CDs (certificates of deposit) are a type of savings account with a fixed rate and term, and usually have higher interest rates than regular savings accounts.
0.50%SoFi members with direct deposit activity can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum direct deposit amount required to qualify for the 4.50% APY for savings. SoFi members with Qualifying Deposits can earn 4.50% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that are equal to or greater than $5,000 every 30 days. Members without either Direct Deposit or Qualifying Deposits will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 8/2/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
Just as a retirement account is beneficial even if you don’t add thousands of dollars to it each month, so too is a bank account useful, even if it isn’t overflowing with cash. The account also provides access to mobile check deposit services, online bill pay and a safe place to store your money.
When less-than-stellar customer service is already testing your patience, finding out that one of the largest banks in the country opened millions of fake accounts in their customers’ names might leave you on the brink of ditching the traditional banking system altogether. For some consumers, it’s enough to keep them from joining it in the first place.
Despite the headlines, your money is safer in a bank account than under your mattress. Most financial institutions are federally insured, meaning that deposits of up to $250,000 are backed by the U.S. government. What’s more, banks dedicate plenty of resources to thwarting hackers and mitigating other online threats.
They think fees are too high or unpredictable
Costly fees keep some people away from banks — and it’s hard to blame them. If you were to pick a run-of-the-mill bank account that came with a $7.50 monthly fee, you could end up paying about $150 per year once you factor in a couple of $30 overdraft charges.
But there are solutions: free checking and savings accounts. Often, these accounts come from online institutions, which also have lower or no overdraft fees. Before you join a bank or credit union, take a good look at its fee schedule to avoid surprises.
Not having a bank account comes with its own steep costs. Prepaid debit cards, which some people use in place of a checking account, can have fees that total nearly $200 or $500 annually, depending on whether the card comes with direct deposit services, according to a NerdWallet study.
4.50%SoFi members with direct deposit activity can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum direct deposit amount required to qualify for the 4.50% APY for savings. SoFi members with Qualifying Deposits can earn 4.50% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that are equal to or greater than $5,000 every 30 days. Members without either Direct Deposit or Qualifying Deposits will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 8/2/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
These cash accounts combine services and features similar to checking, savings and/or investment accounts in one product. Cash management accounts are typically offered by non-bank financial institutions.
These cash accounts combine services and features similar to checking, savings and/or investment accounts in one product. Cash management accounts are typically offered by non-bank financial institutions.
5.50%*Base annual percentage yield (variable) is 4.75% as of 7/31/23. 5.50% APY reflects a .75% boost available as a special offer with qualifying deposit. Terms apply. Cash Reserve is only available to clients of Betterment LLC, which is not a bank, and cash transfers to program banks are conducted through clients’ brokerage accounts at Betterment Securities.
Min. balance for APY
$0
CDs (certificates of deposit) are a type of savings account with a fixed rate and term, and usually have higher interest rates than regular savings accounts.
CDs (certificates of deposit) are a type of savings account with a fixed rate and term, and usually have higher interest rates than regular savings accounts.
0.50%SoFi members with direct deposit activity can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum direct deposit amount required to qualify for the 4.50% APY for savings. SoFi members with Qualifying Deposits can earn 4.50% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that are equal to or greater than $5,000 every 30 days. Members without either Direct Deposit or Qualifying Deposits will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 8/2/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
Some people's past banking troubles, such as bounced checks or unpaid fees, keep them from being able to open a standard checking account. That’s where second-chance checking accounts come in handy.
These products may not come with all of the services offered by traditional accounts, but they eliminate the need to go to expensive alternative financial-service providers. Plus, if you use your account responsibly for six months to one year, you might be able to switch to a standard account.
If you don’t have a bank account for one of these reasons, we highly recommend re-evaluating your stance. Banks and credit unions may not be perfect, but they’re far better — and cheaper — than your other options.
