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What is a Lifeline Checking Account

By Edited Nov 13, 2013 0 0

A Checking Account for Low-Income Consumers

A Lifeline Checking Account is a unique account in that it is tailored around the low-income population and senior citizens. Unlike a second chance account, a Lifeline Checking account is offered by large banking institutions as a way of bringing all walks of life into the banking arena. Everyone deserves to be served by financial institutions and this is a way of incorporating banking option into the masses. Many times low-income families are overlooked by the banking institutions and therefore placing them in even greater financial poverty. Not only that, many service are sending benefits by direct deposit making it difficult for those that can’t afford some of the high fees associated with traditional banking. By providing avenues for the low-income members of society to have access financial products and services, they are better able to plan for their future and society moves together in general as a whole.

What can you expect from a Lifeline Checking Account? One of the characteristics of this type of an account is a low or no balance requirement and low monthly fees or sometimes none at all depending on the state. Often times fees are waived for ATM usage too. Most of the time there is a limit on the number of checks that you are allowed to write with this type of account. Furthermore, many services are limited or are not available with a Lifeline Checking account. I have seen some banks that require a hundred dollars to open the account and then charge three dollars a month maintenance fee, and others that require no opening balance and charge twenty five cents per check. Check with the your financial institutions to learn more about the laws that apply to your state.

Currently seven states require that banks offer Lifeline Checking Accounts and Lifeline Savings Accounts. These states are Illinois, Massachusetts, Minnesota, New Jersey, New York, Rhode Island, and Vermont. Some of the larger banks have dropped free checking, however, the law still applies in these states. The terms and conditions of these accounts are set by the states that requires that they be available, and not by the banks themselves.

Before you feel that you are unable to secure a checking account call around to different banks in your town and see what they can offer you. There are over 10 million Americans without checking accounts and believe me the banks want part of that pie too. There are all kinds of checking accounts available today with different qualification requirements to meet the needs of society considering the economy in the past few years. There are checking accounts that offer prepaid credit cards in worse case scenarios. These are not great options, but they can be cheaper than paying check cashing fees and purchasing money orders, envelopes, and stamps.


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