August 2023’s Top 9 Second Chance Bank Accounts

August 2023's Top 9 Second Chance Bank Accounts

The Best Second Chance Bank Accounts: Accessing Financial Services Despite a Negative Banking History

At times, our banking history may present challenges when attempting to open a new bank account. If a bank has previously closed your account due to a negative bank account history, some financial institutions may deny you the opportunity to open a new account. However, there are select financial institutions that offer second chance banking, providing access to financial services regardless of past banking mishaps. In this article, we will review some of the best checking accounts that cater to individuals with a negative banking history. Additionally, we will explore the benefits of second chance bank accounts and provide insights from finance experts on choosing the best account.

The Benefits of Second Chance Bank Accounts

Opening a second chance bank account can be a strategic move to improve your banking history and create opportunities for future financial growth. Despite previous issues with your banking history, these accounts offer you a chance to rebuild trust with financial institutions and take advantage of various financial services.

Our Top Picks for Second Chance Bank Accounts

Chime Checking Account and Chime Savings Account
Varo Bank Account and Varo Savings Account
Capital One 360 Checking®
SoFi Checking and Savings
Dora Financial Everyday Checking Account
Dave Spending Account
TheFirst Step Checking

All the financial institutions on our list are protected by FDIC or NCUA insurance, ensuring the safety of your money. Despite the recent closure of First Republic Bank, it’s important to note that your funds are secure at federally insured financial institutions, with up to $250,000 per depositor protected in a bank account.

Insights from Financial Experts

To provide you with expert advice on choosing the best bank account, we consulted with four finance experts:

Tania Brown, certified financial planner at SaverLife
Roger Ma, certified financial planner with lifelaidout® and author of “Work Your Money, Not Your Life”
Sophia Acevedo, certified educator in personal finance, banking reporter at Personal Finance Insider
Mykail James, MBA, certified financial education instructor at BoujieBudgets.com

These experts emphasize the importance of considering certain factors when selecting a second chance bank account. For instance, you should be aware of the account’s fees and whether they can be waived, the level of bank security, the accessibility of your money in both online and in-person settings, and the ease of transferring funds. Additionally, some second chance bank accounts may not offer checks or a debit card, which can help you avoid overdrawing your account. It is also worth checking if the bank allows you to upgrade to a regular account after maintaining a positive balance for a certain period.

Methodology for Choosing the Best Second Chance Bank Accounts

At Personal Finance Insider, extensive research is conducted to provide useful and reliable content to assist you with making informed financial decisions. In compiling our list of second chance bank accounts, we considered various sources, such as our guides on the best banks, as well as reviews of Hispanic American-owned banks, Black-owned banks, and credit unions, and those regulated by the CDFI. Our top picks were selected based on criteria such as low minimum opening deposits, low monthly service fees, and accessibility from anywhere in the US.

Frequently Asked Questions About Second Chance Bank Accounts

We have compiled a list of frequently asked questions to address any concerns or doubts you may have about second chance bank accounts. These questions cover topics such as eligibility criteria, account features, and limitations.

Reviews of Selected Second Chance Bank Accounts

Let’s take a closer look at some of the chosen second chance bank accounts:

Chime Checking and Savings Account

Chime stands out because it doesn’t require a credit check or review by ChexSystems. Moreover, it does not charge monthly service fees, and you can open an account online from anywhere in the US.

Varo Bank and Savings Account

Varo offers an opportunity for second chance banking without the need for a credit check or ChexSystems review. Their Bank Account has no monthly service fees and includes the benefit of early direct deposit. Additionally, Varo provides a high-yield savings account with competitive interest rates.

Capital One 360 Checking

Capital One 360 Checking does not use ChexSystems to assess your risk as a consumer when opening a bank account. This account charges no monthly service fees, foreign transaction fees, or overdraft fees. It provides access to a large network of ATMs and also offers high-yield savings accounts and CDs without considering ChexSystems.

SoFi Checking and Savings

SoFi stands out by not utilizing ChexSystems to determine eligibility for their checking and savings accounts. They offer a cash bonus of up to $250 for qualifying direct deposits, making it an attractive option for those comfortable with maintaining both accounts in one place.

Dora Financial Everyday Checking Account

Dora Financial’s Everyday Checking Account is Bank On certified, ensuring low costs and fees. It offers an online account with a $0 minimum balance requirement. Additionally, Dora Financial’s mobile app is available in both English and Spanish, which may be advantageous for Spanish-speaking individuals.

Dave Spending Account

Dave is a mobile fintech platform that provides banking services and financial tools to build credit and financial history. The Dave Spending Account offers budgeting features and rewards, allowing users to track and manage their finances efficiently. The platform also offers a unique feature called Dave Side Hustle, connecting users to remote work opportunities.

The First Bank First Step Checking

The First Bank is one of the largest community development financial institutions (CDFIs) offering second chance bank accounts in multiple states. First Step Checking is ideal for those who prefer a brick-and-mortar bank account, with low monthly service fees compared to other brick-and-mortar financial institutions.

Other Second Chance Bank Accounts Reviewed

In addition to our top picks, there are several other second chance bank accounts available. While they didn’t make our top list, they may still be worth exploring depending on your specific location and needs. These accounts are offered by institutions such as Bank of America, Carver State Bank, Citizens National Bank, Commonwealth National Bank, First Independence Bank, First Imperial Credit Union, GECU, Guadalupe Credit Union, Hope Credit Union, OneUnited Bank, Rio Bank, River City Federal Credit Union, St. Louis Community Credit Union, Sun Community Federal Credit Union, Transit Employees Federal Credit Union, Wells Fargo, and Woodforest.

Assessing Bank Trustworthiness

To determine the trustworthiness of the selected banking options, we consulted the Better Business Bureau (BBB) ratings. Varo received an A rating, Dave received a B rating, Chime received an F rating due to several unresolved customer complaints, and USAlliance Financial received a D- rating. It is worth noting that Capital One and Chime have been involved in recent public controversies. Chime reached a settlement with the California Department of Financial Protection and Innovation, while Capital One paid a settlement following a data breach.

Choosing a second chance bank account is an important step towards rebuilding your financial standing. By considering the insights provided by finance experts and reviewing the top recommended accounts, you can make an informed decision that suits your financial needs and improves your banking history.