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If you have bad credit or have a history of bank accounts that aren't in good standing, it might be hard to open a bank account at a new financial institution. Luckily, some banks and credit unions provide second chance banking so you can still create bank accounts and use banking services, regardless of your financial history.
We've reviewed over a dozen financial institutions. Here are our picks for the best checking accounts for people with a negative banking history. Our guide specifically highlights second chance banking with no monthly fees or low monthly fees.
All of the financial institutions on our list are protected by FDIC or NCUA insurance. Money is safe at a federally insured financial institution. When a financial institution is federally insured, up to $250,000 per depositor is secure in a bank account.
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Icon of check mark inside a promo stamp It indicates a confirmed selection.Perks Earn $250 when you open a checking account using the code CHECKING250 and receive at least 2 direct deposits, each of $500 or more, within 75 days of account opening
Fees no monthly service fee Annual Percentage Yield (APY) See website for details Minimum Opening Deposit BonusEarn $250 when you open a checking account using the code CHECKING250 and receive at least 2 direct deposits, each of $500 or more, within 75 days of account opening
Capital One is a strong bank overall. You'll earn competitive interest rates on online savings accounts and CDs.
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Icon of check mark inside a promo stamp It indicates a confirmed selection. Perks Get paid up to 2 days early with direct deposits Fees no monthly service fee Annual Percentage Yield (APY) Minimum Opening DepositChime has one of the best checking accounts out there, but it doesn't offer joint accounts or pay the best savings rate. Its strongest feature is that it's great for people who might not qualify to open accounts elsewhere — it doesn't check your credit score or banking history when you apply for a checking account, savings account, or credit card. It also provides several credit-building tools.
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Fees no monthly service fee Annual Percentage Yield (APY)The Annual Percentage Yield ("APY") for the Chime Savings Account is variable and may change at any time. The disclosed APY is effective as of September 20, 2023. No minimum balance required. Must have $0.01 in savings to earn interest.
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Annual Percentage Yield (APY) Minimum Opening DepositVaro is a good option if you're comfortable with online banking, especially if you're searching for checking and savings accounts that do not use ChexSystems to review your past banking history or do a credit check. The Varo Savings Account also lets you earn a solid interest rate that's much higher than what many traditional and high-yield savings accounts pay — it may be worth considering if you plan to set up direct deposits and meet certain balance requirements. Many of the best high-yield savings accounts let you earn a high rate without meeting specific criteria, though.
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Fees no monthly service fee Annual Percentage Yield (APY) 3.00% to 5.00% Minimum Opening DepositVaro is a good option if you're comfortable with online banking, especially if you're searching for checking and savings accounts that do not use ChexSystems to review your past banking history or do a credit check. The Varo Savings Account also lets you earn a solid interest rate that's much higher than what many traditional and high-yield savings accounts pay — it may be worth considering if you plan to set up direct deposits and meet certain balance requirements. Many of the best high-yield savings accounts let you earn a high rate without meeting specific criteria, though.
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Icon of check mark inside a promo stamp It indicates a confirmed selection. PerksNew and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus when they set up Direct Deposit of at least $1,000 during the Direct Deposit Bonus Period. Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 12/31/24. Full terms at sofi.com/banking. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC. SoFi members with Direct Deposit can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the 4.50% APY for savings (including Vaults). Members without Direct Deposit will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 8/27/2024. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
Earn up to a $300 bonus with qualifying direct deposits for eligible customers through 12/31/24. Earn up to 4.50% APY on savings balances (including Vaults) with direct deposit.
Fees no monthly service fee Annual Percentage Yield (APY)SoFi members with Direct Deposit or $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either Direct Deposit or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi members with direct deposit are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of 8/27/2024. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
Minimum Opening Deposit BonusSoFi Checking and Savings is a great account option if you don't mind keeping your savings and checking in one account.
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Icon of check mark inside a promo stamp It indicates a confirmed selection. Perks Earn $50 bonus when you set up direct deposit Fees no monthly service fee Annual Percentage Yield (APY) Minimum Opening Deposit Bonus Earn $50 bonus when you set up direct depositThe best checking accounts have low fees and are easy to use — Experian Smart Money offers both with zero fees, plus access to an extensive ATM network and a user-friendly mobile app. The account stands out because it helps you improve your credit score when you make everyday bill payments. For this reason, the account is best for people who are just starting to build credit or could use help improving it.
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Fees $3 monthly service fee Annual Percentage Yield (APY) Minimum Opening DepositWho is eligible for second chance banking? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
People who are denied standard bank accounts because of past issues like overdrafts, bounced checks, or negative balances generally qualify for second chance banking.
Are there fees associated with second chance bank accounts? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
Yes, many second chance bank accounts come with monthly bank maintenance fees, although some banks may waive fees for second chance bank accounts after you've had the bank account for a certain amount of time and haven't run into any problems.
Can a second chance bank account help improve my credit score? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
Not directly, but they can help. While second chance bank accounts don't directly report to credit bureaus, responsible use of these accounts can help your credit by helping you qualify for other credit-building products.
How long do I need to have a second chance bank account before I can get a standard account? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
Transitioning from second chance to standard banking takes time. Typically, you'll need to have a second chance bank account in good standing for six to 12 months before you can get a standard account.
Do all banks offer second chance banking? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
No, not every bank offers a second chance bank account. Community banks and credit unions are more likely to offer them as part of their efforts to promote financial inclusion.
What bank gives you a second chance? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
Several banks offers second-chance bank accounts. Capital One 360, The First Bank, and SoFi are some of the best banks for second-chance bank accounts that don't check ChexSystems, for instance.
The best second chance bank accounts will give people with bad credit a chance to open bank accounts and earn interest without charging high monthly maintenance fees. Ideally, banks will avoid ATM fees and other types of fees, as well.
Here are the best second-chance bank accounts as picked by Business Insider editors in 2024.
Capital One 360 Checking is notably one of our top picks from the best checking accounts guide. It doesn't charge monthly service fees, foreign transaction fees, or overdraft fees, making it a good free checking account. You'll also have access to 70,000 surcharge-free ATMs through the Capital One, MoneyPass, and AllPoint ATM networks.
Capital One 360 doesn't use ChexSystems to assess your risk as a consumer when opening a bank account.
At Capital One, you'll also be able to open a high-yield savings account and CDs without having to worry about ChexSystems.
Capital One 360 Checking Accounts automatically decline overdrafts if you don't choose an overdraft service. The bank also charges a $2 fee if you use an out-of-network ATM.
The Chime® Checking Account and Chime Savings Account do not require a credit check or review by ChexSystems.
Chime also stands out because it doesn't charge monthly service fees, and you may open an online account from anywhere in the US.
Before you open a savings account, you're required to open a checking account. This is also an online-only account, so you'll have to be comfortable with online banks.
The Varo Bank Account, which is the bank's version of a checking account, is a great choice if you're looking for a second chance bank account with zero monthly service fees. It also offers early direct deposit.
Varo doesn't use ChexSystems to review your bank account history. You also don't need to worry about a credit check.
At Varo, you could also get a high-yield savings account with a competitive interest rate. The Varo Savings Account pays 5.00% APY on up to $5,000 if you receive direct deposits of $1,000 each month and keep a positive balance in the Varo Bank Account and Savings Account.
To qualify for the the Varo Savings Account, you must open the Varo Bank Account first. Varo is also an online-only financial institution so it doesn't have physical branches.
SoFi Checking and Savings doesn't require a review of ChexSystems. You also might like this account if you're comfortable maintaining your checking and savings in one account.
SoFi is offering a cash bonus of up to $300 with qualifying direct deposit for eligible customers (offer expires 12/31/24, terms apply).
The account works best if you set up a direct deposit. That way, you'll qualify for the cash bonus and the highest-tier interest rate on savings account balances.
Experian Smart Money doesn't use ChexSystems to review your banking history. You also might like this account if you're looking for ways to build credit. Experian Smart is automatically linked to Experian Boost, which is a financial tool that allows you to build credit for making on-time payments for phone bills, utility bills, rent payments, and more.
The account also offers early direct deposits and a $50 bonus when you set up direct deposit.
You might prefer one of our other top picks if you want overdraft protection. If you make a transaction that would result in a negative account balance, Experian will deny the purchase.
The Dora Financial Everyday Checking Account is Bank On certified, which means it meets the program's requirements of low costs and low fees. It's a great option if you'd like to open an online account with a $0.
Dora Financial may also stand out if you primarily speak Spanish. The platform's mobile app is available in English and Spanish.
Customer support may be limited since it's only available through the platform's mobile app or email. If you prefer telephone customer support, you might consider other accounts.
You might like the Dave Spending Account if you're searching for a banking option with budgeting features, rewards, and a high interest rate. You may set up individual personal finance goals or keep track of how much you spend in a specific category by creating a budget. Dave also has a unique feature called Dave Side Hustle. You can find remote work opportunities by setting up a profile through the app.
Dave is a mobile fintech platform with a bank account that doesn't require a credit check.
There's a $1 monthly service fee to use the Dave mobile app. If you don't want to deal with monthly fees, you might consider choosing one of our other top picks.
First Step Checking might be ideal if you'd like to open an account with a brick-and-mortar bank. The First Bank is one of the largest community development financial institutions (CDFIs) to offer a second chance bank account in multiple states.
Compared to other second chance bank accounts at brick-and-mortar financial institutions, it has a low monthly service fee.
The First Bank only serves residents in Alabama, Georgia, Mississippi, Florida, and Louisiana. The account also doesn't include checks. You'll need to upgrade to a traditional checking account after six months to have access to check writing.
The Better Business Bureau assesses businesses based on responses to customer complaints, honesty in advertising, and transparency about business practices.
Below are the BBB ratings of our favorite banking options.
| Institution | BBB rating |
| Capital One 360 | A+ |
| Chime | C+ |
| Varo | A- |
| SoFi | A+ |
| Experian | D- |
| Dora Financial | NR (USALLIANCE Financial, partner bank, received a D-) |
| Dave | A- |
| The First Bank | A+ |
Chime has a C+ rating from the BBB because of the high number of complaints filed against it and government action taken against it.
Varo received an A- rating because it has received a high volume of customer complaints on the BBB website.
Experian received a D- rating from BBB because it has received a high volume of customer complaints, has not resolved a few of those complaints, has not responded to a few of those complaints, and has taken a long time to respond to customer complaints.
Dora Financial currently has an NR (No Rating) from the BBB due to insufficient information. Their partner bank, USALLIANCE Financial, received a D- rating because it has failed to respond to several customer complaints.
Dave has an A- rating from the BBB due to a high volume of customer complaints.
Capital One, Chime, and Experian have been involved in recent public controversies.
Capital One used to have an account called 360 Savings. In 2019, Capital One launched the new 360 Performance Savings Account, which paid a much higher interest rate. Many customers thought their old savings accounts would transition into this new one, but in reality, they had to open a new 360 Performance Savings Account to earn a higher rate. So some customers have been earning a significantly lower savings rate for years.
In the lawsuit, the plaintiffs' lawyers allege that Capital One didn't inform 360 Savings customers that these were two distinct accounts or that 360 Performance Savings paid a higher rate. However, Capital One wants this case dismissed because it claims people had every opportunity to learn these facts on their own. This case is still ongoing.
In 2024, the Consumer Financial Protection Bureau entered into a consent order with Chime, saying that Chime did not provide timely refunds to people who closed their account with money still in it. Chime was required to pay over $4.5 million to affected consumers and the CFPB.
Also in 2024, the Department of Financial Protection and Innovation entered into a consent order with Chime, which required Chime to pay $2.5 million. DFPI claimed that Chime wasn't properly handling customer complaints. Through the consent order, Chime agreed to make reforms to its customer service procedures.
In 2023, the Consumer Financial Protection Bureau required Chime to pay a total of $3 million, with $1.5 million going to consumers. The CFPB says that Chime misrepresented the time and fees involved in some of its transfers.
In 2023, Experian was required to pay $650,000 in a settlement with the Federal Trade Commission. The FTC claimed that Experian was sending emails marketing additional products to customers without giving them an option to unsubscribe. Experian did not admit wrongdoing by settling.
In November 2022, Experian was required to pay a total of $13.67 million regarding two settlements over data breaches that occurred in 2012 and 2015. The 2015 breach occurred when an authorized person obtained access to personal information in the Experian network, primarily affecting people who applied for T-Mobile services between September 2013 and September 2015. The 2012 breach involved identity theft.
We've provided information on what second chance banking is and whether you would qualify for it to help you decide whether opening a second chance bank account is right for you.
A second chance bank account is a type of checking account for people who have a bad enough banking history that they can't open standard accounts. Some second chance bank accounts are savings accounts, although they probably won't offer as high an annual percent interest as the best high-yield savings accounts do. Generally, the banks that offer second chance bank accounts don't use ChexSystems to check your credit history, so you don't need a good credit score to open these accounts.
If someone has a history of overdrafting, not paying fees, or having a negative balance, they might not be able to open a regular bank account. Second chance bank accounts let them have an account they can use to build up a good banking history and, eventually, qualify for standards accounts and products again.
Second chance bank accounts generally function a lot like regular bank accounts: They provide a place for you to keep the money that you plan on spending, whether that's for regular expenses like rent, mortgages, or utilities or for purchases like groceries.
Some, but not all, second chance bank accounts also allow you to use debit cards and checks for purchases. Depending on the bank you choose, you might also be able to bank online using mobile banking apps.
Some second chance bank accounts don't offer all of the features you'd expect from a checking account. They might not let you use checks or debit cards to make sure you don't accidentally overspend. They also might not let you overdraft. While this means you won't rack up overdraft fees, the best banks for overdrafts offer overdraft protection.
Second chance bank accounts might also come with higher monthly fees. Check with the bank you're planning on using to see what fees and features their second chance bank account comes with.
If you can't open a standard checking account, second chance bank accounts can be invaluable when it comes to paying bills and building a strong financial history.
With a checking account, it's much easier to save and spend money. You can easily cash checks you receive, you don't need to keep track of paper bills for everything, and it's easier to keep track of your funds as you're learning how to budget.
Second chance accounts also help you build up a healthier banking history. If you can keep your second chance bank account in good standing for six to 12 months, you'll generally be able to start opening standard accounts with more features and lower fees. You can also start working on savings goals, like saving up to buy a house, which in turn can help your credit history.
When looking for a second chance bank account, check credit unions and community banks near you. Both of these are more likely to offer second chance bank accounts, as they're more likely to offer programs supporting financial inclusivity. Some larger banks also offer second chance bank accounts, so make sure to read up on several different banks to see which account is right for you.
When deciding which bank to use, keep an eye out for service fees and features. In general, you'll want an account with a lower service fee, especially if you've struggled with paying fees in the past. However, you'll also want to decide which features, like early direct deposit, might be important enough to you to pay a slightly larger fee.
Otherwise, opening a second chance banking account is similar to opening a checking account. The only place where it differs is in identification requirements; depending on the institution, second chance bank accounts are more likely to allow non-standard types of ID, such as foreign IDs or passports.
When you have a second chance bank account, it's important to make sure you're practicing good banking habits so you can build up your history. A lot of the tips for how to save money apply here. Make sure you're not overdrafting your account or trying to make purchases you can't pay for. Also make sure to pay any fees that come with your account on time, so you're not building up unpaid fees.
After a certain time period, usually between six to 12 months, you'll be able to switch from a second chance account to a standard account. Check with your bank to see how long that period is, and make sure to switch to a standard account when you can to access better features and a potentially lower fee.
To learn more about what makes a good bank or credit union and how to choose the best fit, four experts weighed in:
The things you should look for in a second-chance bank account are about the same as any other bank account. Here are a few questions our experts have shared that can help you figure out if a specific bank account is right for you:
At Business Insider, our goal is to create useful content that helps you make good decisions about your money. We recognize every person has distinct preferences, so we provide ample options to help you find the most suitable financial product or account.
We research extensively to make sure you know the standout features and limitations of a financial institution.
First, we researched to find financial institutions that offered second chance bank accounts. We looked at our Hispanic American-owned banks and credit unions guide, our Black-owned banks and credit unions guide, best banks of 2024, and CDFI reviews to compile a list of institutions to consider.
Then, we reviewed second chance bank accounts to find the most-well rounded banking options. Our top picks have low minimum opening deposits and low monthly services fees. Several of our favorite accounts can be easily opened from anywhere in the U.S.