Second Chance Checking Accounts: 200+ Banks for a Fresh Start

Banking

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 $700 bonus
  • $25 minimum opening deposit
  • Monthly fee can be waived
  • Over 40,000 fee-free ATMs

U.S. Bank is currently welcoming new applicants with a special online offering:

  • Earn up to $700 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 June 27, 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.

3. First Tech Federal Credit Union

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  • Earn up to 5.00% APY
  • No monthly fees
  • No minimum balance requirements
  • Over 30,000 fee-free ATMs

First Tech Rewards Checking is an attractive choice for those seeking a rewarding banking experience without standard limitations. This account offers high-yield interest rates and a range of financial benefits on one platform.

There are no minimum balance requirements and no monthly maintenance fees. Members can secure a $300 bonus by initiating a qualifying direct deposit of $1,000 or more monthly for three consecutive months.

A prominent feature of First Tech is its competitive interest rate, which can reach up to 5.00% APY on both checking and savings accounts, significantly higher than many other banks.

First Tech also ensures convenient access with almost 30,000 CO-OP network ATMs across the country for fee-free withdrawals. Additional benefits include real-time fraud monitoring and free overdraft transfers, enhancing both flexibility and security.

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. 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.

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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.

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