8 Fee-Free Bank Accounts You Can Open Even if You Have Bad Credit

If you have bad credit, you can still open a checking account — and the options available today are much better than they used to be. Before, people with poor credit often had to settle for second-chance checking accounts, which came with high fees and limited features. Fortunately, banking has changed a lot.

In this article, we’ll explore the best checking account options for people with bad credit, the features to look for, and how to compare accounts to find the right fit for your needs.

Even if You Have Bad Credit, You Don’t Have To Settle for a Subpar Checking Account

Some online checking accounts that don’t check your credit or banking history now offer better perks than traditional accounts from big banks. This is largely because of fintech companies — technology companies that partner with banks to provide modern financial services.The rise of fintechs has even encouraged some traditional banks and credit unions to improve their second-chance accounts to stay competitive.

Fintechs, short for “financial technology companies,” are not banks themselves. Instead, they team up with banks to offer accounts with unique features. For example, Chime works with BankCorp and Stride Bank to hold your money, and your funds are insured by the FDIC, just like they would be at a traditional bank.

One major benefit of fintech accounts is their exceptional mobile and online banking tools. Since they don’t have physical branches, you can handle almost everything from your smartphone. Many fintech accounts also offer perks like early access to direct deposits — sometimes up to two days early — and mobile check deposit using your phone’s camera.

If you need to deposit cash, most fintechs let you do so at retail stores like Dollar General or 7-Eleven, although there’s often a fee. Some fintechs do offer free cash deposits. You can also send and receive money easily through apps like Venmo, CashApp, PayPal, or Zelle.

Comparing Fintech Checking Accounts to Traditional Bank Accounts

When it comes to “bad-credit checking accounts,” you’ll generally find two main types: accounts from traditional banks and those offered by online-only or mobile-focused fintech companies. Each option has its strengths and weaknesses, depending on your needs.

Traditional Bank Accounts

Traditional banks like Bank of America, Wells Fargo, and Capital One offer familiar, in-person services that some people prefer. Key features include:

• Branch access: You can visit a physical location to deposit cash, get help with your account, or speak directly with a representative.

• FDIC insurance: Deposits at traditional banks are insured by the Federal Deposit Insurance Corporation (FDIC), which protects your money up to $250,000 per account.

• Paper checks: Many traditional banks still allow paper check usage, which can be important if you prefer checks over debit cards or online bill pay. However, some are starting to phase out paper checks for bad credit accounts.

• Higher fees: Traditional banks often charge monthly maintenance fees, charge overdraft fees, or require a minimum balance, which can add up.

• Limited tech features: Compared to fintechs, traditional banks may not offer as many cutting-edge mobile tools or money management features.

Fintech Checking Accounts

Fintech companies like Chime, Varo, Dave, Albert, GoBank, and Serve are designed for people who prefer online and mobile banking. Their accounts are especially appealing if you’re rebuilding your finances. Benefits include:

• No monthly fees: Many fintechs eliminate fees like monthly maintenance charges, overdraft fees, or even minimum balance requirements.

• Credit-friendly access: Fintechs usually don’t perform credit checks, making their accounts accessible to people with bad credit or no banking history.

• Tech-savvy tools: Features like credit-building programs, automatic savings tools, and spending trackers are often built into their apps.

• Fee-free ATMs: Most fintechs offer access to large ATM networks for free withdrawals.

• Mobile-first banking: These accounts are managed entirely online or through apps, giving you access to your money anytime, anywhere.

• FDIC-insured: While fintechs aren’t banks themselves, they partner with FDIC-insured institutions, so your money is just as safe as it would be at a traditional bank.

Which One Is Right for You?

If you value in-person banking or need paper checks, a traditional bank might be the better choice. On the other hand, if you’re looking for lower fees and better digital tools and don’t mind banking entirely online, fintech accounts can offer more flexibility and convenience.

What To Look For in an Online-Only Checking Account

Online-only checking accounts can offer a range of benefits. Look for accounts with these key features:

• Low or no fees: No monthly service charges, overdraft fees, or balance requirements.

• Convenience features: Early direct deposit, mobile check deposits, and fee-free ATM access through networks like Allpoint or MoneyPass.

• Tech compatibility: Integration with Google Pay, Apple Pay, and excellent mobile apps for account management.

• Budgeting tools: Built-in tools to track spending, manage bills, or set up automatic savings.

Since online banks compete aggressively for your consumer business, many offer perks beyond standard features. These include:

• Enhanced security features, like the ability to freeze and unfreeze your debit card (which helps prevent unauthorized transactions) and the ability to generate virtual card numbers for online use to protect your physical card information

• Money management benefits, like higher interest rates, savings and investment tools, and budgeting help

• Convenience and rewards, including fee-free money transfers, cashback rewards, and no foreign transaction fees

Best Fee-Free Online Bank Accounts for People With Bad Credit

Finding a fee-free online bank account when you have bad credit doesn’t have to be overwhelming. Many online banks and fintech companies offer accounts with no credit checks, no monthly fees, and perks like early direct deposit and overdraft protection. Some even pay interest or include budgeting tools to help you manage your money. While traditional banks also have fee-free options, online banks and fintechs often provide better features, lower costs, and user-friendly mobile apps. 

Below, we’ve outlined some of the best fee-free online bank accounts for people with bad credit, highlighting each account’s unique features and benefits to help you find the right fit.

Please note that these are not affiliate links, and we strive to provide unbiased, trustworthy information to help you make the best financial decision for your situation.

Capital One 360

Capital One is one of the most innovative traditional banks. It offers a few options to avoid overdraft fees should you choose to allow potential overdrafts.

✅No monthly fee

✅Free in-network ATM (Capital One, Moneypass, Allpoint)

✅Early access to direct deposit

✅No minimum balance

✅Lock card security protection

✅Easy peer-to-peer transfer

✅Overdraft protection available

✅Interest paid on accounts

✅In-person branches

Note that Capital One 360 doesn’t have a minimum required credit score, but their user agreement states they may run a credit report for new customers.

Chime

Chime is one of the most feature-rich accounts available. Paper checks are available through online bill pay.

✅No monthly fee

✅Free peer-to-peer transfers regardless of banking institution

✅Free in-network ATMs (MoneyPass, Visa Plus, Alliance)

✅No minimum balance

✅Early access to direct deposit

✅Lock card security protection

✅Interest paid on account

✅Secured credit card available

✅Optional overdraft protection

Note that if you apply for Chime’s secured credit card, you’ll first need to have a Chime checking account.

Varo

Varo doesn’t have in-person branches, but it offers convenient cash deposits at over 7,000 CVS locations in addition to several other benefits.

✅No monthly fee

✅No minimum balance requirement

✅Overdraft protection available

✅Early access to direct deposit

✅No credit check

✅Lock card security protection

✅Interest paid on account

✅Secured credit card available

✅Free in-network ATMs (Allpoint)

✅Free peer-to-peer transfers with Varo accounts

✅Free cash deposit at participating CVS locations

Dave

Dave is a popular account that can help you with budgeting, saving, and building your credit.

✅No monthly fee

✅No minimum balance requirement

✅Overdraft protection available

✅Early access to direct deposit

✅No credit check

✅Lock card security protection

✅Free in-network ATMs (MoneyPass)

✅Virtual cards available

Current

Current is a full-featured account with a free tier and a premium account. The premium account is $4.99 per month and comes with bonus features.

✅No monthly fee for basic account

✅No minimum balance requirement

✅Overdraft protection available

✅Early access to direct deposit

✅No credit check

✅Lock card and virtual cards security protection

✅Free in-network ATMs (Allpoint)

Aspiration

If you care about the environment and want to fight climate change, Aspiration may be the bank for you. They don’t invest any deposited money in fossil fuel companies, and you can use your spare change to plant trees.

✅Pay what you want (including $0) for basic Spend and Save account (monthly fee of up to $7.99 for Plus account, which provides carbon offsets every time you purchase gas)

✅No minimum balance requirement

✅Overdraft protection available

✅Early access to direct deposit

✅Interest paid on account

✅Virtual card security protection

✅No credit check

✅Cash back on some purchases

✅Free in-network ATMs (Allpoint)

This is the only fintech that offers a full credit card (not secured). Though they don’t check your credit for the rest of the account, they will check your credit if you decide to add a credit card.

One

One is a full-featured account with a special perk: You can put part of your money into a shared pod. This is a type of joint account that can have several owners, which can be helpful if you want to control how much of your account you share with your spouse or children.

✅No monthly fee

✅No minimum balance requirement

✅Overdraft protection available

✅Early access to direct deposit

✅Interest paid on account

✅Lock card and virtual card security protection

✅Free in-network ATMs (Allpoint)

✅Offers secured credit card

Betterment

Betterment is an investment-centric app, but it's also a feature-rich banking company. It offers some good retirement and financial planning tools and several types of accounts, including IRAs.

✅No monthly fee

✅No minimum balance requirement

✅No credit check

✅Lock card security protection

✅Interest paid on account

✅Reimburses ATM fees

✅Cash back rewards

Let’s Summarize…

In the past, if you had bad credit, you had to settle for a subpar checking account, if you could get a checking account at all. These accounts had high monthly fees and crippling overdraft fees. If you couldn’t find a bank to open a checking account with, you had to take your check to a check-cashing business on payday, wait in line, and pay a hefty fee. Good news: Those days are over, and you now have many great banking options.

Fintech companies are offering accounts that are on par with the top-tier accounts that big banks give to their best clients. Competition is high to sign up new clients and lure people from the big banks. So the accounts are easy to open and come with great perks. There’s an account out there for you, no matter your circumstances, as long as you have a smartphone, tablet, or computer.