A guaranteed checking account, also called a second-chance checking account, is a banking account for individuals who mismanaged their finances in the past or who have low credit scores and cannot acquire a traditional banking account, explains GOBankingRates. Second-chance checking accounts differ from traditional accounts in that they typically require a monthly fee and a certain minimum balance, states The Simple Dollar.
Individuals reported to ChexSystems by their bank because of suspicious activity, unpaid banking service fees, or numerous overdrafts or bounced checks are labelled as a high-risk customers, and they're often denied a traditional checking account, explains The Simple Dollar. Local banks and credit unions may offer second-chance checking accounts to those individuals, while major nationwide retailers typically do not, with the exception of Wells Fargo, PNC Bank, Woodforest National Bank and BBVA Compass in certain states.
To obtain a guaranteed checking account, some banks require participation in a money management or financial literacy class, states NerdWallet. A guaranteed checking account typically provides the safety and features of a regular bank account, and may offer overdraft protection, while allowing individuals to recuperate their finances and build a reputable banking history. After maintaining a guaranteed checking account for a certain amount of time, people sometimes qualify for a promotion to a regular bank account.