Top Second Chance Bank Accounts in 2022

Some banks don’t like giving second chances to customers who have less-than-stellar financial histories, especially since it could expose them to expensive risks. A record of bounced checks or debit card overdrafts could easily lock you out of the conveniences of modern banking.

Fortunately, banks also like making money, and some offer special “second chance” accounts that minimize their risk while allowing consumers to stay in the banking system. A second chance bank account gives customers with troubled records a fresh opportunity to demonstrate they can bank responsibly.

When it comes to a second chance account, fees are an unfortunate reality. But some accounts offer customers a better deal than others, and we’ve researched our database to find the second chance accounts with the most reasonable fee structures, while also factoring in whether they provide online and mobile banking, and how accessible accounts are throughout the country.

Second chance account basics

With a second chance bank account, customers shut out of traditional bank accounts get the opportunity to win their way back into a bank’s good graces. Similar to credit bureaus, financial services company ChexSystems maintains records of consumers’ banking histories. Bounced checks, overdrawn accounts or instances of fraud can all end up on your ChexSystems record; if you accumulate enough black marks on ChexSystems, banks could deny your application to open a new account.

Because second chance accounts are meant for customers who have demonstrated bad banking behavior, some lack features of traditional accounts, such as overdraft protection. In the eyes of the bank, you represent too much of a risk for them to extend you such courtesies.

Nobody likes paying fees, and we generally advise consumers to avoid needless banking fees due to the many fee-free banking options available. But fees are the price you pay for access to banking when you have a poor record. Plus, the second chance accounts listed below give you access to online and mobile banking, which is always a plus.

Best second chance bank accounts

1. Chime

Fintech app developer Chime is not a bank, however their online checking account product is open to everybody, no matter how bad your record is with ChexSystems. Chime does not check on applicants with ChexSystems, plus they offer lots of non-traditional features to help you get your financial life back on track. Best of all is the fact that they charge no fees at all, and require neither a minimum opening deposit or a minimum balance.

Chime account features:

• No opening balance or minimum balance requirements.
• Set up direct deposit for your paycheck, and the funds from each pay period will be deposited as soon as the transaction is initiated, giving you access to your pay up to two days earlier than conventional checking accounts.
• Automatic savings features to help you save in your connected Chime Savings account.
• The app sends you daily bank account balance notifications, and sends transaction alerts every time you use your debit card.
• You can disable the debit card from the app.

Fees to watch out for:

• Chime’s service is almost entirely fee-free: No monthly charges, no ACH transfer fees, no foreign transaction fees, and no ATM fees if you withdraw funds from MoneyPass ATMs.
• If you make an ATM withdrawal outside of these networks, there is a $2.50 fee.
• Overdrafts are not permitted, so there is never an overdraft fee.

2. Peoples Bank Cash Solutions Second Chance Checking

This Texas-based bank offers a second chance bank account that is available nationwide, and so long as you don’t have a record of bank or checking fraud on your record, you should be approved for this account. You’ll need to deposit at least $30 before the bank activates your account and provides you with checks and a debit card.

Fees to watch out for:

• $4.95 monthly maintenance fee
• $27.50 overdraft fee
• $27.50 nonsufficient funds fee
• $3.95 printed statement fee (which can be avoided with electronic statements)
• $2.00 ATM withdrawal fee at machines not owned by Peoples Bank
• $25 stop payment fee
• $20 account closure fee (if within 90 days of opening account)

3. Varo Bank Account

Varo only offers a few banking products, but their main bank account is designed for second-chance banking. There’s no credit check, no minimum balance requirements or monthly fees and no overdraft fees — if you try to overdraw your account, your transaction will be declined. Varo customers can withdraw money fee-free from the Allpoint ATM network, which has ATMs in stores like Target, CVS and Walgreens.

Varo Bank Account Features

• Varo Bank allows you to deposit checks through a mobile app once you’ve received a direct deposit in the account, and you can deposit cash through Green Dot locations.
• Once you’ve set up a direct deposit, you can earn your paycheck a few days early through Varo.

Fees to watch out for:

• $2.50 for out-of-network ATM withdrawals
• $5.95 for cash deposits via third party money transfer services
• $2.50 for over the counter cash withdrawals

4. Woodforest National Bank Second Chance Checking

This regional bank has a checking account aptly named Second Chance Checking, to help people rejected by other banks access — provided they live in one of the 17 states where a physical branch exists and can meet the $25 minimum opening deposit requirement. Those states are: Alabama, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, and West Virginia.

Fees to watch out for:

• $9.95 monthly maintenance fee if you use a direct deposit, $11.95 if you do not
• $9 one-time account set-up fee
• $2.50 ATM withdrawal fee when used at a non-Woodforest network ATM
• $15 debit card set-up fee
• $32 overdraft fee (for each charge)

Alternatives to a second chance bank account

Get a prepaid debit card

Tired of the traditional banking experience? You could opt for a prepaid debit card instead. With a prepaid card, you can load money onto it and spend at merchants that accept major credit and debit cards. But if you try and spend more money than what’s on the card, the transaction is declined — although this prevents you from accruing any overdraft or insufficient funds fees. This is useful if you feel you may still have trouble managing your spending and need an extra layer of security to prevent you from getting into trouble.

Some prepaid cards offer extra perks like advance direct deposit and free ATMs so long as you stay in their network.

Open a secured credit card

You may also have better luck applying for a secured credit card if your credit score is in good enough shape. Usually, this requires depositing cash with the lender, who then gives you the credit card for the same amount. Each month that you make on-time payments, the bank will report that good behavior to the credit bureaus, helping you boost your credit score. At the end of the payment period (generally 12 months, though it varies by banks), you’ll get the full deposit back.

Secured cards can come with high interest rates and many don’t feature the enticing rewards other high-end cards do, but they get the basic job done for consumers who don’t need a card with a high credit limit.