U.S. Bank wants people who aren’t using a bank to start.
The Minnesota-based financial institution announced its Safe Debit Account Monday, which is geared towards the millions of people who don’t currently have a bank or aren’t fully utilizing a bank (they’re often called “unbanked” or “underbanked”).
U.S. Bank says the account, which has a monthly maintenance fee of $4.95, offers the same benefits as a traditional checking account – but without checks or overdraft fees. Customers will be able to deposit money, withdraw cash and pay bills with their debit card or online and mobile bill pay, according to the news release.
To open a Safe Debit Account, visit any U.S. Bank branch. And starting in November, customers will be able to open this type of account online or over the phone.
Unbanked and underbanked
In the FDIC’s latest survey of unbanked and underbanked households, the agency found that in 2013, 9.6 million U.S. households didn’t have a checking or savings account. And 24.8 million households were underbanked – they have a bank account, but also used alternative financial services in the past year.
Those with the highest unbanked rates were non-Asian minorities, lower income, younger and unemployed households, the FDIC said in a May 2016 report about banks’ efforts to serve the unbanked.
“The Safe Debit Account demonstrates U.S. Bank’s commitment to provide all customers safe, convenient, affordable access to financial services,” Lynn Heitman, executive vice president at U.S. Bank, said in the release, noting the Safe Debit Account is a “great way” to start a relationship with a bank.
These types of accounts are popping up more and more as financial regulators and nonprofit groups join forces to help make sure the unbanked and underbanked have access to a basic checking account.
And U.S. Bank is one of the larger financial institutions to launch such a bank account, but isn’t the first, the Star Tribune says. In May, Wayzata TCF Financial rolled out ZEO – a similar prepaid card and cash service – and two Ohio-based banks also offer checkless accounts, among others, the paper says.
The director of Prepare + Prosper, a nonprofit that works with people on their taxes, told the Star Tribune that U.S. Bank’s account looks like it’ll be helpful for underbanked consumers, and hopes this will help low-income people build credit.