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Updated on Wednesday, October 1, 2014
This week, two new products have been announced that specifically target the un-banked:
- Citibank Access Account
- GoBank, in partnership with Wal-Mart
Nearly 10 percent of Americans do not have bank accounts, and these new products promise to make it easier and cheaper for people to enter the banking system. These accounts come after the introduction of Bluebird (by American Express), Safe Balance (by Bank of America) and Opportunity (by Wells Fargo).
If you need access to a basic account, but have difficulties opening an account (because of bad previous history that is now reported on your Chexx Report), or you want to avoid the high overdraft fees, these accounts could be for you.
None of the accounts offer the ability to borrow money. So, you should only view these as low-cost transaction accounts, and will need a separate strategy (like a credit card from your local credit union) for any borrowing needs you might have.
We have reviewed the products to see which offers the best deal.
No account is perfect. In summary:
- If you need to write personal checks, and you don’t mind a six day hold on check deposits, then BlueBird is for you
- If you don’t need to write checks, then:
- Citi is best if you have a monthly direct deposit, or you can keep at least $1,500 in your account
- Bank of America is best if you don’t have a direct deposit or high level of funds to keep in the account
And the cheapest account is….
Bluebird by American Express is the cheapest account:
- $0 monthly fee, with no direct deposit requirement and no minimum balance requirement
- No overdraft and NSF fees
- MoneyPass ATMs are free; $2.50 at other ATMs
If you have a monthly direct deposit, you can have a fee-free account at GoBank, Wells Fargo or Citi. However, GoBank has long check hold times, and Wells Fargo still has expensive overdraft fees.
If you do not have a direct deposit, then Bank of America is the cheapest. And if offers BillPay.
The most services are offered by….
Bluebird by American Express enables BillPay and the ability to write checks. None of the other accounts offer check writing.
If writing checks is not important, you still have access to BillPay at Bank of America, Citi, Wells Fargo and Go Bank.
Ability to Deposit Funds
The banks enable access to their branch and ATM network. In addition, for any deposited check, $200 would be made available on the next business day.
However, Bluebird and GoBank have very long hold times (they do not promise less than six days).
None of these products are perfect, but they could be useful if you need access to a bank account.
If you don’t deposit checks, than BlueBird could be a great option. The Wal-Mart cash register becomes your branch, and you can keep this account completely free. However, the long hold time may make this account impossible to use.
If you do need to deposit checks, and don’t have a direct deposit, than Bank of America has the best offer. You will need to pay $4.95 per month, but you get access to the entire Bank of America network.
Unfortunately, none of these products offer overdraft protection at reasonable prices. If you need to borrow money, you will need to find other options.