Best Second-Chance Bank Accounts in 2022 - MagnifyMoney

Best Second-Chance Bank Accounts in 2022

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Many financial institutions avoid giving bank accounts to customers with bad credit or unfavorable banking histories. But some banks will offer customers a second-chance bank account –– an account designed for anyone who has a poor personal finance history.

Second-chance banking is a fresh start with a few drawbacks, like fees and limited services. Here are the five best second-chance bank accounts we found using our unique methodology. Each pick is available nationwide.

Best second-chance bank accounts in 2022

1. Varo Bank Second Chance Banking

  • Monthly fee: $0
  • Minimum balance to open: None
  • Employs ChexSystems: No

Varo Bank’s Second Chance Banking account isn’t too different from many of the best checking accounts out there. For starters, there’s no monthly or overdraft fees. A plus: the bank doesn’t check ChexSystems or credit reports.

You’ll receive a debit card, fee-free access to 55,000+ ATMs and the option to open a high-yield savings account at Varo.

You can get early access to direct deposit and receive your paycheck two days early. And while Varo doesn’t offer paper checks, you can deposit a check 24/7 via the Varo Bank app. Applying for this account online won’t affect your credit score.

2. SoFi Online Bank Account


on SoFi Bank, N.A’s secure website

  • Monthly fee: $0
  • Minimum balance to open: None
  • Employs ChexSystems: No

SoFi’s Online Bank account also provides a clean slate without the burden of monthly or overdraft fees. To enjoy the benefits of this account, sign up with direct deposit for a bonus of $50 to $300 plus 3.75% annual percentage yield (APY) on all balances. If you overdraft your account, you’re covered up to $50 with no fees if you have a monthly direct deposit of $1,000 or more.

This account comes with a SoFi debit card and fee-free access to 55,000+ ATMs. Download the SoFi Money app to access your account, send money to friends, pay bills, deposit checks or order checks (because you won’t automatically receive them). With virtually no fees and all the added benefits, this account is a great low-stakes choice.

3. Wells Fargo Clear Access Banking

  • Monthly fee: $5
  • Minimum balance to open: $25
  • Employs ChexSystems: Yes

The Wells Fargo Clear Access Banking account is another solid second-chance account, but note that the monthly fee cannot be waived and there is an opening deposit requirement. Overdrafts are typically stopped before they can happen, but if not, you won’t be charged an overdraft fee. After a year of good banking, this account can convert to any traditional Wells Fargo checking account.

While you won’t receive checks with this account, you’ll receive a debit card, fee-free access to around 12,000 ATMs. Use the Wells Fargo mobile app to make mobile deposits and manage your account.

Apply for this account online or at a branch (find Wells Fargo branch locations here).

4. Chime Second Chance Banking

  • Monthly fee: $0
  • Minimum balance to open: None
  • Employs ChexSystems: No

With Chime’s Second Chance Banking account, you won’t pay monthly, foreign transaction or minimum balance fees. As for overdrafts, Chime will simply reject any payments or withdrawals that would put your account in the negative — so you won’t pay overdraft fees.

This account comes with a savings account and free debit card you can use fee-free at 60,000+ ATMs. The Chime banking app gives customers early access to paychecks with direct deposit.

Applying should only take a couple of minutes and won’t impact your credit score, according to the Chime website.

5. US Bank Safe Debit

  • Monthly fee: $4.95
  • Minimum balance to open: $25
  • Employs ChexSystems: N/A online

US Bank’s Safe Debit account may not market itself as a second-chance bank account, but the features and benefits make for a good option. Other than the low, unwaivable monthly fee and opening deposit, you can benefit from a free debit card (used at ATMs across the nation), free credit score check and the bank’s mobile app, where you can pay bills and deposit checks online. Mobile check deposit isn’t available for the first 30 days after opening the account.

US Bank doesn’t offer checks or overdraft protection with this account, though you won’t accrue any overdraft fees because payments aren’t authorized if funds aren’t available.

It should only take a few minutes to apply for US Bank’s Safe Debit Account online, according to the bank’s website.

What is a second-chance bank account and how does it work?

A second-chance bank account is designed for folks who have a financial history that prevents them from opening a regular bank account. It’s meant for those who have a track record of:

  • Unpaid fees
  • Delinquent or negative balances
  • Bounced checks
  • Involuntary account closures
  • Excessive overdrafts

These occurrences are typically reported to ChexSystems, a consumer reporting agency that maintains records of your banking history. The ChexSystems database is similar to the three credit bureaus (TransUnion, Experian and Equifax), but instead of tracking your credit history, it tracks your deposit account activity.

When a bank sees an adverse banking history in ChexSystems, they may not want to work with you. However, they may offer another option in the form of a second-chance account, which gives you the opportunity to start over and earn back good financial standing. Some banks may then allow you to open a traditional account after a certain period of time to prove you’re reliable.

Not all financial institutions offer second-chance bank accounts, but many do — both local and nationwide.

Tip: Second-chance banking is different from banks and credit unions that don’t check ChexSystems. While there are banks that do not check ChexSystems at all, there are also banks that do check it but offer second-chance accounts or free checking accounts anyway.

Second-chance bank account pros and cons

Second-chance banking is a clear path to rebuilding your finances. But there are some downsides, like more fees. Here are some pros and cons of second-chance banking.

Easy account approvalDoesn’t rebuild your credit
Allows you to avoid riskier or more expensive methods of cash managementTypically more fees with fewer services and features
Helps you to rebuild your banking history and relationship with your bank

How to choose a second-chance bank account

To choose the best second-chance bank account, consider the same features we did for our list of the best second-chance accounts above:

  • Reasonable fee structure: Fees are expected with second-chance accounts, but there are some banks that charge more reasonably. Stay particularly aware of overdraft and monthly service fees.
  • Online and mobile banking: Most banks today offer a mobile app or some form of online banking. This feature could help you stay on top of your financial habits and recovery.
  • Reasonable opening deposit: Like fees, these accounts tend to come with higher initial deposit amounts, but you may find some that are more reasonable.
  • Features and services: Any features like a free debit card and unlimited check-writing privileges would be extra perks, as some second-chance accounts may not offer them.
  • Fewer restrictions: Some of these accounts may impose limits on withdrawals or how much you can spend on your debit card. Prioritize accounts that come with higher limits.

Alternatives to second-chance bank accounts

While second-chance accounts are the next-best option to a traditional account, you may want to consider some alternatives. These typically come with balance requirements, lack traditional banking features and charge costly transaction fees:

  • Prepaid debit cards: A card with a pre-loaded amount of your money. You can’t spend more than what’s on the card, though it does help you avoid overdraft or insufficient funds fees. Some of the best prepaid debit card options offer some extra perks.
  • Secured credit cards: Requires depositing cash with a lender, who then gives you the credit card for the same amount. These may come with higher interest rates and no enticing rewards, but they get the job done.
  • Online payment services or apps: Money apps like PayPal or virtual wallets allow you to store cash and make payments online. Some may allow you to get a debit card, though funds may not be FDIC-insured since these are not traditional banks.
  • Check-cashing services: These services provide a way to access your cash immediately, without a bank account, in exchange for a fee. Just be aware that they may charge additional fees based on the amount of the check and the type of check.

Frequently asked questions

You may find it difficult to get a bank account if you have a banking history of unpaid fees, repeated overdrafts, involuntary account closures, insufficient funds or other financial issues on your ChexSystems report.

Several banks and fintech companies, like Varo Bank, Chime and SoFi, offer second-chance bank accounts.

Yes. Many banks, both local and nationwide, will offer these accounts as a way for you to rebuild your banking history, financial standing and relationship with the bank. Your money is still protected if the account is at an FDIC-insured bank or NCUA-insured credit union.

Most often, yes. Since second-chance bank accounts are for individuals with negative banking histories, being able to rebuild your financial standing can come with a tradeoff of more or higher fees.

Financial institutions like SoFi, Chime and Varo do not consider ChexSystems reports when potential customers submit applications for new accounts.

Methodology: How we chose the best second-chance bank accounts

After reviewing bank accounts across our sister site DepositAccounts, financial websites and other sources, we compiled a list of the top five nationally available second-chance bank accounts. Most second-chance accounts come with fees as a tradeoff for a poor banking record, so we prioritized more accessible and affordable accounts. We ranked accounts higher if they had lower opening and balance requirements, fewer fees, mobile and online banking and more free ATM access.