Lifeline Account

What Is a Lifeline Account?

A lifeline account alludes to a checking or saving account with low fees or no month to month or annual fees and no base balance and deposit requirements. Lifeline accounts are targeted to lower-income earning customers or first-time account holders.

How Lifeline Accounts Work

An essential or lifeline bank account goal is to bring all individuals, especially low-income or underbanked, into the economy by empowering saving and long-term investing. Low-income residents are much of the time overlooked in the economy since they have relatively little disposable income. In any case, by cultivating their long-term financial wellness, they can turn out to be more critical donors down the road.

Most states have laws expecting banks to give an affordable banking services to their customers. In New York, for instance, a state law was enacted in 1994 that required commercial banks, savings banks, and credit unions to offer "lifeline accounts" to all customers as fundamental banking accounts.

Lifeline accounts are not generally called lifeline accounts however are sometimes alluded to as essential checking or saving accounts. The thought behind any of these accounts is to acquire first-time customers or support low-income customers. These types of checking and savings accounts don't bring about fees that nickel and dime the account holder.

Essential banking accounts with low fees or no fees plus no base deposit requirement can act as lifelines to the people who need them.

Instances of Lifeline Accounts

One model is BankFinancial, settled in Illinois, which offers its customers a lifeline checking account. The benefits incorporate free overdraft protection, no returned thing fees, free ATM transactions at any of its branches, and no base balance requirement. Be that as it may, customers need to have an initial deposit of $50 plus pay a $5 month to month service fee.

Bank of America offers what it calls a rendition of a lifeline account focused on understudies called an Advantaged SafeBalance Banking account. This account has no overdraft fees, gives a debit card rather than checks, and offers an anticipated month to month maintenance fee.

MyCreditUnion.gov gives a rundown of affordable credit unions that offer affordable banking options like "lifeline account" for lower-income customers.

Special Considerations

The rise in digital banks has given some affordable checking and savings account options with limited fees. In any case, to utilize these accounts, you must have solid internet or a mobile telephone. Digital banks might offer more advantages, for example, lower fees, no deposit or balance requirement, and transactions should be possible by means of your telephone. Nonetheless, on account of a lower-income customer seeking a lifeline account, the advantages may not be sufficient. For instance, digital-just banks don't give brick-and-mortar services, and now and again, don't give actual paper checks.

In the event that you can't find a lifeline account, there are low-income, low-cost credit unions and banks offering affordable fundamental accounts. A decent place to begin your hunt is your neighborhood BankOn, a national coalition of government agencies, financial institutions, and community organizations collaborating to help underbanked and unbanked networks.

Features

• A lifeline account is generally an essential checking or savings account intended for underbanked customers.
• A lifeline account's benefits are in many cases low balance requirements, low to no month to month fees, no base deposit requirements, and other cost-cutting elements.
• A few digital banks offer lifeline account-like options for customers, yet downsides incorporate a lack of paper checks and a brick-and-mortar bank.
• In certain states, as New York, banks are required by law to give some affordable banking options.