Do you have a checking account? If not, what is holding you back? You could be discouraged about getting a bank account by requirements you can't meet, unpredictable fees, or lack of cash to open an account. You may not have experience using a mainstream bank, so you aren’t sure a bank fits for your lifestyle.
If you don't have access to a checking account, you could be paying high check cashing and prepaid debit fees. You may be waiting to receive funds that could come much faster through direct deposit as well. This takes extra time out of your day to pay bills in person or buy money orders. There are many benefits to having a bank account. That's why we're happy to offer the Bank On checking account. In this article, we’ll explain what this account is and why it might be right for you.
How does a Bank On account work?
The Bank On account is a regular checking account you can open with a minimum deposit of $25. It offers FDIC (Federal Deposit Insurance Corporation) protection up to $250,000, free online and mobile banking and bill pay, mobile deposit, a debit card, a low monthly fee, and access to a network of more than 50,000 surcharge-free ATMs.
Your Bank On debit card offers zero liability fraud protection, EMV chip protection, ID theft defense, and access to ApplePay, GooglePay, and iPay QuickPay, as well as other great features.
Why are we offering this account?
In the past year, especially, we've seen how hard it has been for the unbanked and underbanked to participate in the economy and receive desperately needed pandemic assistance. Without a checking account that allows direct deposit, consumers had to wait days or weeks for a paper check or a debit card with their pandemic relief funds loaded on it. Workers found their unemployment benefits delayed as they waited for checks to arrive. Once they received their checks, they had to pay a fee to cash them at a check-cashing store or a supermarket, lowering the effectiveness of the aid.
How do non-mainstream financial services hurt consumers?
First, we need to look at who is using fringe financial services.
Approximately 12 million adults — nearly 5% of U.S. households-- don't have any accounts at a mainstream bank. These people represent an unbanked population. Nearly 24 million adults, or 10% of homes in the United States, use fringe financial services, such as check-cashing services or prepaid cards, from non-mainstream banks. They are considered an underbanked population.
There are high costs associated with being unbanked or underbanked. Many fringe financial services charge high fees, which can hit these consumers very hard. Researchers have noted that one-third of unbanked and nearly one-half of underbanked households earn under $30,000 yearly. Researchers also note nearly half of households with people of color are unbanked or underbanked, compared to less than 20% of Caucasian homes. On average, researchers note consumers who use fringe financial services pay more than $3,000 in fees per year, which is a huge expense for lower-income households.
If you’re unbanked or underbanked, you may have also experienced how hard it is to buy a car from a mainstream car dealer. You may have had to take out a high-rate loan from a smaller dealership, again costing you more money than you need to pay. You may also have had to rent-to-own household items or use a payday loan to cover an emergency expense. These types of credit can be costly. With a Bank On account, you can build a banking relationship that can make it easier to get credit at affordable rates. Over time, you can build a credit history. A good credit history can help you get better rates on insurance, a new apartment or house, or even find a better job. That is because landlords, insurance companies, and employers may check your credit history while making a decision. Eventually, building a banking history can even help you buy a home.
That's why we're so excited about the Bank On account: it gives consumers access to a safe place to save money and meet their basic financial needs without having to worry about high or unpredictable fees. It also opens a new financial world that has immediate cost savings and long-term benefits.
If you don’t have a checking account and are interested in learning more about how a Bank On account can help save you money and make your life easier, chat with us or give us a call to find out more.
“The Costs of Being Unbanked or Underbanked,” Forbes, July 28, 2020, https://www.forbes.com/advisor/banking/costs-of-being-unbanked-or-underbanked/