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Pros and Cons

Why use a bank

As long as you can keep some money in your savings or checking account, banks and credit unions may still offer a safer, cheaper way to do your banking. Here’s what they have to offer:

  • A secure place to keep your money in checking and savings accounts.
  • Convenience and safety of a debit card to make purchases instead of writing checks of using credit cards.
  • 24/7 ATM access to your money.
  • Free personal checks. No more money orders!
  • Immediate and free access to your paycheck with direct deposit. Ask your employer for details. You can also go in and cash your check at no cost.
  • Free and low cost online bill payment.
  • Greater opportunity to save money.  You may spend less because money is no longer in your pocket.  There's also less chance of losing it all if you get robbed.
  • A new relationship with a financial institution and the beginning of a financial history.

Need help choosing the right account? Check out our Guide to Choosing.

Why not to use a bank

You may have avoided banks in the past because of complaints like these:

  • Lack of convenience
  • High minimum balance requirements and monthly fees
  • Account opening requirements such as government identification
  • Feeling unwelcome in a bank.
  • Past bad experience with banks (fees that lowered your account balance or badly managed accounts)

Banks are doing more to get your business by extending their hours, offering online banking and low balance accounts. They are working with check-cashers or opening branches in supermarkets and other stores to make you feel more comfortable using their services.

Many banks also realize that people should be able to open an account, even if they’ve had bad experiences in the past. Most banks and credit unions use the “Chex system,” a national registry that tracks people who have had their accounts closed due to bounced checks for five years. Some financial institutions are offering checking account options for people locked out from the Chex system such as Fresh Start Checking, which requires you to take financial education classes and may require either a direct deposit or a minimum balance to start. Contact your bank or credit union and ask whether they offer this type of program.

Get more information on the ins and outs of bank accounts.