Fresh Start Checking Account

September 10th, 2009

A “Fresh Start Checking Account” is a courtesy of financial institutions (namely banks and credit unions) to their clients who do not qualify for our regular accounts because of either fraud or overdraft balances that have been left unpaid. People apply for such second chance accounts as a consequence of mismanagement problems with a bank account in the past, resulting in the financial institution reporting them to ChexSystems or Telecheck. But then the financial institutions, such as banks and credit unions, have come to realize that people make mistakes, and financial trouble in the past shouldn’t totally rule you out of benefiting from banking services. Getting a fresh start checking account can help you start on the path to restoring your financial situation and put it back in good standing; you’re essentially given a fresh start but with some restrictions when compared to a “regular” checking account.

Fresh Start Checking Account Requirements & Restrictions

Some financial institutions charge an “activation fee” to open such an account. Others have a minimum opening deposit that can range anywhere between $25 and $100
There’s always a monthly account maintenance fee, generally between $5 and $10
Some institutions require that you carry a certain minimum balance; some don’t ask for the minimum balance but will waive the maintenance fee is you keep your balance above a set limit
Almost all the banks and/or credit unions offering fresh start checking accounts will issue you a debit card with the Visa or Mastercard logo
You have limited check writing privileges. Only on some very rare occasions do you get unlimited check writing
You get access to ATMs, online banking, online bill pay, and telephone banking
If the account maintains a negative balance for more than a certain amount of days (generally 10), or has excessive overdrafts, it will be closed. Of course, you get no overdraft protection.
Depending on the financial institution, after 6 to 12 months of keeping your account in good standing (no overdrafts), you become eligible for a regular checking account.

Some financial institutions do require that the following two conditions be met before they open a fresh start checking account for you:

Any fees owed on past and closed checking account(s), must be paid in full.
An educational course on maintaining a checking account has to be completed.

Banks That Offer Fresh Start Checking Accounts

If you’re having trouble finding a financial institution in your area that offers a fresh start checking account, you might be able to find a local credit union or bank that will allow you to open an account despite the fact that you have a negative Chexsystems or Telecheck record. In some credit unions or banks, all you’ll be able to open will be a savings account. Other banks will see your negative mark but before they make a decision, they will give you the opportunity to explain your situation; you might end up being able to open a regular checking account if you can prove that financial institution that reported you to ChexSystems has been repaid. Finally, some banks don’t verify new accounts with ChexSystems, but they do conduct credit checks. You don’t have to have perfect credit to be approved, and as long as your credit score is acceptable, you can be approved for the checking and savings account of your choice and avoid the restrictions associated with a fresh start checking account