I have started to see a number of articles lately about so called SAFE accounts and why they are becoming so popular.  What are they?  A SAFE account is a simple bank account that provides an ATM/debit card and has no overdraft risk.  The account is the product of an FDIC pilot program launched in 2011 to reach the 'unbanked' population.   It is called 'SAFE' since its primary purpose is to provide the unbanked a safe place to keep their funds rather than taking the risk involved with operating on a cash only basis.  These accounts also save consumers from paying exorbitant check cashing fees to services that prey on those without a banking relationship.

Do You Really Need A Traditional Bank Account?

It may seem hard to imagine, but 9 million Americans operate without a savings or a checking account and the FDIC says that as many as 25% of American households are 'underbanked.'  Many people have decided that they simply don't need a traditional bank account anymore.  Since most bills can be paid with a debit card there is almost no need to write checks anymore.  I have personally not written a check in years.  I pay for everything with my debit card and in the rare event I need to send in a check, I use the bill pay service provided with my account.  I don't like waiting for checks to clear, worrying if they get lost in the mail, got to the right person or department, etc...  I would much rather use a debit card and know that my transaction has been processed and I have immediate proof of my payment.   I also like to be able to see my 'real' balance without worrying about what outstanding checks may or may not be reflected in my total funds available.

Why People Are Becoming Unbanked

There are a wide variety of reasons that people are unplugging from the banking system.  The largest reason I hear about are the rise in bank fees.  Not just the day to day fees, but the ever growing list of penalties that banks love to collect on.  In recent years there have been countless fines in the millions of dollars levied against banks for unfairly assessing overdraft charges.  Many consumers have simply given up on trying to deal with what they perceive to be a system rigged against their best interests.

Some people are unable to open a bank account due to a low credit score or a prior unresolved issue with a bank.  Many people don't realize that once reported to ChexSystems by a bank you may not be able to get another bank to allow you to open an account.

There are also some ethnic cultures that believe in operating on a cash basis.  Keeping money under the mattress is the only bank that some people place any trust in. 

How To Find A SAFE Account

While the FDIC has coined the phrase 'safe account', your local bank may or may not know what you are asking for if you ask for it by name.  What you are looking for is a simple savings account that has an ATM/debit card associated with it.  Additionally, you should be able to opt out of any overdraft features so that your card will not authorize if funds are not available.  Here is a link to a list of banks that have participated in the FDIC SAFE account pilot program.  You don't necessarily have to limit yourself to this official list, as many banks and credit unions offer a simple savings account with an ATM/debit card but may not involved with the pilot program.

Popular Non-Bank Options For Consumers

• Many people use services like PayPal to send and receive money and with the available ATM/debit card, there is little need for a bank.
• Other services such as the WalMart Money Card provide consumers with an ATM/debit card with free payroll deposit and check cashing at Walmart locations nationwide.
• An advertiser on our website, Vision Premier Visa, offers a prepaid debit card with a large list of benefits including free bill pay, free direct deposit, savings account, and even cash back and roadside assistance.
• American Express has recently launched a new ATM/debit card called Serve which looks very interesting and reinforces my view that these options will only continue to grow.

It is important when using the above services to understand how account fees are assessed and how to avoid them.  For example, with the Walmart Money Card payroll deposits are free but fees are associated with other cash deposits to your card.  It will cost money to withdraw funds at an ATM, but many stores now offer a 'cash back' option when you are making a purchase  (this is how I get cash when I need it).  As with anything, there is a smart way to use these services so that you pay very little in fees.

Conclusion

This type of banking arrangement may not be for everyone, but I am doing whatever I can to make my life less complicated.  The less involvement I have with banks the better mood I seem to be in.  Please use the comments section below to share your own experience or ideas about becoming a banking minimalist.

Helping you make the most of God’s money!

James L. Paris
Editor-In-Chief ChristianMoney.com 
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