3 Best Checking Accounts for Low-Income Households

If you're on the lower end of the pay scale, it can be hard to find financial products that match your needs. Indeed, it can feel like the system is geared toward people who make more money. Particularly as some bank accounts will only waive monthly account fees if you make regular deposits or maintain a certain balance.

The good news is that there are some great free checking accounts that won't ding you for unexpected extras. Even better? Some will even pay you interest or rewards. Here are three to consider if you're a low-income household.

1. Discover® Cashback Debit

Not only is there no monthly fee for the Discover® Cashback Debit, but the account perks go above and beyond many regular checking accounts. In fact, it gives you more perks than several accounts that charge a monthly fee.

Here are some of the reasons people are excited about this account:

• Commitment to no fees: Discover® Bank won't charge monthly account fees or overdraft protection fees and there are no minimum balance requirements. If you lose your debit card, it won't charge you for speedy delivery of a replacement either.
• Cash back: You'll get 1% cash back on up to $3,000 of debit card purchases each month, which could translate to as much as $360 a year.
• Early direct deposit: Early pay means you might be able to access direct deposits, such as your paycheck, two days before the payment date.

2. Axos Bank Rewards Checking

Axos Bank Rewards Checking is another no-fee account that comes with a raft of extra benefits. It won't charge a monthly fee or overdraft fee, and there are no minimum balance requirements. However, if you want to earn interest on your balance, you'll need to jump through quite a few hoops.

Here are some account highlights:

• Commitment to no fees: Axos Bank won't charge monthly account fees or overdraft protection fees.
• ATM fee reimbursement: Axos Bank will pay you back for all domestic ATM fees, no matter what network.
• Earn interest on your balance: You can earn 0.40% (up to 3.30%) APY on your account balance. Bear in mind that you'll need to receive at least $1,500 in monthly direct deposits to qualify for the base rate and activate the higher APYs. After that, the more boxes you can check, the higher the APY you can earn. Boxes include using your debit card for more than 10 monthly transactions, or using certain investment and loan products.
• Welcome bonus offer: If you open your account before July 31 and use promo code RC500, you might be eligible for up to $500 in welcome bonus payments. The catch is that to qualify, you'll need to receive at least $1,500 in monthly deposits and maintain an average balance of $3,000. You'll get $100 for each statement cycle (up to five) when you meet these requirements in the first six cycles after account opening.
• Early direct deposit: You might be able to access direct deposits, such as your paycheck, two days before the payment date.

3. Ally Spending Account

Like the other accounts listed, you can rely on the Ally Spending Account to help you avoid bank fees. It's got some great people-focused tools that make it easy to pay bills, get cash, and manage your money. I'm a big fan of the ways it can help you save. For example, you can opt to automatically round up your spending to the nearest dollar and put the money into your savings.

Here are some other reasons to consider this account:

• Commitment to no fees: Ally won't charge monthly account fees or overdraft fees.
• Overdraft cushion: Not only does Ally not charge overdraft fees, its CoverDraft service gives you a safety net of up to $250. So you don't need to worry about an automatic payment accidentally taking your balance below $0.
• Savings buckets: Ally will help you stick to your budget by allocating your money to different buckets -- like an online envelope budgeting system. It's a great way to track your spending.
• Early direct deposit: You can access your money up to two days early if you set up direct deposit.
• ATM network: You can access over 43,000 Allpoint® ATMs for free. Ally will also reimburse up to $10 in out-of-network ATM fees each statement cycle.

The right bank account can save you money

There were almost 6 million households without access to a checking or savings account in 2021, according to the FDIC. Many are low-income households. Some are nervous about meeting minimum balance requirements or having to pay unexpected fees. When money is tight, it's natural to be cautious. Particularly if you've been stung in the past or heard horror stories about overdraft fees that snowball into hundreds of dollars' worth of costs.

But not only are some bank accounts serious in their no-fee commitments, there are also protections in place to ensure they keep their word. On top of which, living without a bank account can be costly. Money orders and cashing checks will all eat into your budget, and a good checking account will do all that for free.

If you don't currently have a checking account -- or have one that's charging you hefty fees -- it could be costing you $100 a year or more. Take a look at the accounts above or our top free checking accounts and cut the cost of everyday banking.