Why you Need a Bank Account

Yes, Banks can make your Life Easier

Time and Money
Christian Michaels/Photographer's Choice/Getty Images

Are you living life without a bank account? In a recent study, the FDIC reported that roughly 10 million US households were “unbanked.” Instead of using checking and savings accounts, the unbanked rely on check cashing stores, money orders, prepaid debit cards, and cash for their day-to-day financial needs.

Maybe you dislike banks and think they’re boring and greedy, or maybe you’re unable to open an account due to residency issues or a rough financial history.

No matter what the case, your life might be easier if you open an account at a bank or a local credit union.

Time is Money

It's expensive to live without a bank account, but the real cost might be your time. If you could make payments by writing a check, swiping your debit card, or signing up for online bill pay, you’d free up a lot of hours. Without those tools, you’re stuck waiting in line to buy money orders, traveling to pay cable and electric bills in-person, and making an extra trip to the check cashing store every payday. Then you’ve got to reload your prepaid card, and do it all again next month.

There are only 24 hours in a day. Even if you can’t find a truly free checking account (which you should be able to do), how much time would you gain by paying the average $15 per month maintenance fee? You might be able to cover that by working an extra hour or so per month, and it would buy you more time than that with your loved ones.

Fees, Fees, Fees

You might not be saving much (or anything) by avoiding the bank:

  • You pay a small fee every time you buy a money order
  • Check cashing stores take a small percentage of each paycheck
  • Prepaid debit cards are notorious for fees (costs for adding money, checking your balance, monthly fees, and more)
  • It’s hard to find free ATMs if you don’t use a local bank or credit union

All of those fees add up. Could you come out ahead with a bank?

Get Paid Quickly

One of the best reasons to open a checking account is to get paid by direct deposit. Your employer will automatically deposit your wages to that account, and you can spend the money or withdraw cash as needed. In some cases, the money hits your account a few days before your co-workers get their paper checks. You don’t need to physically be at work to get paid, and you don’t need to deposit or cash your check.

A Safe Place to Build Savings

Ideally you're a some money each month, and a bank account is a great place to do that. Without an account, you need to find a safe place to store money, and that can be a challenge (plus it’s tempting to grab that cash and spend it). Your bank savings in a bank are generally insured by the US government, so if the bank (or federal credit union) goes under or gets robbed, you don’t lose all of your money. Learn how to ensure you’re protected.

Bank accounts also let you monitor your spending and your progress. You’ll watch your account grow, and you can see where your money goes (so it’s easier to make your accounts grow more).

Someone to Bounce Ideas off Of

Bank employees can be of the most valuable benefits of a bank or credit union. Sure, some of them simply want to sell products and generate fees, but many of them are happy to help you make smart decisions. If you’ve got too much in your checking account, should you use a certificate of deposit (CD) or move the money over to savings? If you need money, should you use a credit card or get a personal loan? These people do this every day, and they can easily explain the pros and cons.

Without a banker, your only exposure to financial advice is somebody who offers "alternative" financial services. It's also harder to borrow money, but you can certainly live a credit-free (and debt-free) life.