Some alternatives to traditional bank accounts include cash management accounts, credit unions and money market mutual funds, according to CNN Money. These non-bank businesses offer checking and savings accounts similar to the ones offered by commercial banks.
Cash management accounts consolidate the investments and available cash of account owners, CNN Money notes. Brokerages offer these accounts to affluent customers who want to invest their income in liquid accounts that offer high rates of interest. Typical cash management accounts offer customers credit card and checking privileges, lines of credit and ATM debit cards. Money market accounts, which mutual fund companies offer their customers, have higher yields than the money market deposit accounts offered by traditional banks. However, the Federal Deposit Insurance Corporation does not insure money market accounts against loss.
Individuals looking for alternatives to bank accounts can also join credit unions, which operate like conventional banks. However, unlike banks, credit unions are non-profit cooperatives whose members share similar interests. As compared to commercial banks, credit unions offer high interest rates on savings and checking accounts, claims CNN Money. Online banks, most of which offer free checking and savings accounts, are also an alternative to conventional banking, states U.S News and World Report.