Overview of banks
Banks control money. For most people, banks only track how much money each customer deposits, stores that money, and allows their customer to remove money. However, you also would go to bank if you needed a loan for a car or house.
Banks make money by loaning money. Although banks do many things, their primary role is to take in funds—called deposits—from those with money, pool them, and lend them to those who need funds.
Banks work in the middle between depositors (who lend money to the bank) and borrowers (to whom the bank lends money).The amount banks pay for deposits and the income they receive on their loans are both called interest.
Banks and credit unions, discussed below, are the best way to handle your money and make it easy when opening a bank account for felons.
Overview of credit unions
In the United States, credit unions are not-for-profit organizations that exist to serve their members rather than to maximize profits. Like banks, credit unions accept deposits and make loans. But when you join a credit union you become a member-owner instead of just a customer. Since credit unions have member-owners and not customers, they focus on providing a safe place to save and borrow at reasonable rates instead of focusing on making money for the bank itself. When opening a bank account for felons a credit union is often a great choice over a bank.
Benefits of credit unions over banks
- Better Service: Credit unions serve members of modest means. Low income credit unions provide financial services at reasonable rates in areas that are often underserved by banks. This makes it easier when opening a bank account for felons in underserved areas.
- Favorable Rates: Fees and loan rates at credit unions are generally lower, while interest rates returned are generally higher, than banks and other foraprofit institutions.
- Customer Service: Credit unions are democratically operated by members, allowing account holders an equal say in how the credit union is operated, regardless of how much they have invested in the credit union.
Overview of Check Cashing businesses
Check cashing businesses, which are common in low income neighborhoods, make you pay for your money. They are usually the same businesses that offer payday loans. If you are able to budget your spending, the only benefit of managing your money through a check cashing
business is that they are open 24/7.
Banks will cash checks for free if you have an account, and check cashing businesses will charge you up to $20 for every $1000 cash provided.
Although check cashing businesses cost money up front, they are often the only option for people without a bank account. Evaluate the costs and benefits of cashing a check at one of these businesses – does the cost of immediately receiving the cash outweigh the price (in money and time) of getting a bank account for felons?
Some check cashing businesses do not cost as much. For example, WalMart charges only $3 to cash a check up to $1000. Evaluate your own situation, and determine whether you should assume the upfront costs of cashing a check through this type of business.
Check cashing businesses should only be used as a last resort if do not have the capability of opening a bank account for felons at a bank or credit union.
Overview of Payday Loans
Check cashing businesses also generally provide payday loans, which are short-term, high interest loans. The costs of receiving money through these services s EXTREMELY high. We can’t stress enough that payday loans are almost always a bad idea! The interest rate on these loans are often 100 times higher than a loan from a bank! It is very easy to get stuck with payday loans you can’t pay off and in a position where you are paying huge amounts of interest for what started off as a small loan.
Evaluate the costs of receiving this money immediately against delaying whatever payment you intend to use it for. If there is any possible way to avoid getting a payday loan you should avoid them.
Benefits of banks and credit unions
- Convenience: If you have a checking account, you can easily pay by check or through online bill pay. It’s also cheaper than buying a money order (and you’ll have proof of bank statements that you paid your bills). If you get an Automated Teller Machine (ATM) or debit card for the account, you can withdraw money easily or make payments at stores. A debit card is usually accepted for purchases anywhere credit cards are accepted.
- Safety: Your money will be protected from theft and fires. Plus, your money will be federally insured so if your bank or credit union closes, you will get your money back. The maximum amount of money that can be insured is $100,000.
- Easy to save money: Many banks offer an interest rate when you put your money in a savings account. The interest will help your money grow over time. Be sure to shop around and check what fees are involved a you don’t want to wind up paying more in fees than you are gaining in interest.
If you have a checking and saving account with the same institution, you can have your money transferred periodically from checking to savings, putting the money aside to help grow your savings.
- Bank accounts for felons are cheaper: Banks and credit unions generally offer their account holders free or low cost services:
- Cashing checks: Using a check cashing outlet really adds up. You can deposit and cash your checks at the institution where you have a bank account for free.
- Paying bills: Without a bank account for felons you probably rely on check cashing outlets, telephone bill pay or money orders—all of which have attached fees—to pay your bills. With a checking account, you can write checks for free or pay online at a low cost.
- Transferring/wiring money: If you use a money transfer company to wire money to another person’s account, you will pay a fee, usually a percentage of the amount of the transfer. Depending on the amount you want to transfer, this fee can be expensive. If you wire from your bank account to another person’s account, your bank will usually charge a flat rate that is generally lower than the money transfer company.
- Accessing cash: When you need cash but don’t have a bank account, you may decide to use a credit card to get a cash advance from an ATM. The credit card company will charge you a transaction fee and interest. If you have a bank account and an ATM or debit card, you can access your money from your own bank’s ATM for free. Although you can access your money from any ATM, you will likely pay a transaction fee if you use an ATM other than your bank.
If you use check cashing outlets or the piggy bank, you’re missing out on the many benefits of managing your money with a bank account.
- Bank accounts for felons can help you access credit: Banks and credit unions can help you access credit to acquire a home, a car, student or personal loan, because banks tend to favor existing customers, particularly those who manage their money well. Plus, going to small loan lenders that lend you cash quickly can be quite expensive because they charge lending fees and high interest rates.
While bank accounts for felons are preferred over check cashers and piggy banks, banks will also have fees that you should be aware of. For example, banks will charge you if you use your debit card on an ATM that is not theirs. Also, depending on the type of account you have, you must maintain a minimum balance of a certain amount to avoid being charged. It’s always best to shop around for the best product that fits your needs.
Opening a bank account for felons
The procedure for opening a bank account for felons and a credit union are the same. It is best if you appear at the bank in person to open a bank account for felons, as the bank may guide you to an account that is appropriate for your needs.
Requirements
The minimum information a bank must obtain when opening a new bank account for felons typically includes:
- Name
- Date of Birth
- Address
- Social Security Number
- Two forms of identification:
- Primary identification which can include:
- Divers license
- State issued ID card
- Passport
- Foreign issued ID
- Secondary identification which can include:
- Major or local debit/credit card embossed with name (does not include gift cards)
- College ID of institution where applicant is currently enrolled
- Utility Bill bearing name/address used for opening account
- Rental/Lease Contract for current residence
- Documentation of home ownership for current residence
- Current State Issued Learner’s Permit
- Permanent Resident Card
- Certificate of Citizenship or Naturalization
- Immigration form I-571
- Certified Copy of Court Order: Must contain full name and date of birth. Examples include: Adoption document, name change document
- Employment Authorization Card (with photograph) issued by a U.S. Federal Government agency
Some banks require more information. Before going in to open an account for felons you should check the banks requirements on their website or call them.
Types of bank accounts for felons
There are many types of bank accounts for felons, and banks will work with you to determine which is appropriate for you. Ask yourself what you will be using your account for. Will you be making purchases online? Paying bills? Or do you just want a place that will accrue interest?
Checking bank accounts for felons
These are the most common types of bank accounts for felons. They allow you to store your money at the bank and remove it in a few ways. All checking bank accounts for felons allow you to write paper checks, and most will provide you with about 200 checks for free.
Most checking accounts for felons give you a “check card” or “debit card.” This is similar to a credit card, but does not allow you to spend more than you have in your account without incurring a fee. Notice how the card pictured above says “debit.” This means that the card is connected to a particular bank account with a limited amount of funds. When you spend money on a debit card, you spend it directly from your account.
Most checking accounts also allow you to pay bills over the internet directly from your account, and these accounts will also allow you to view your balance – the amount of money in your account – over the internet.
Savings bank accounts for felons
A savings account allows you to accumulate interest on funds you’ve saved for future needs. Interest rates can be compounded on a daily, weekly, monthly, or annual basis. Savings accounts vary by monthly service fees, interest rates, method used to calculate interest, and minimum opening deposit. Understanding the account’s terms and benefits will allow for a more informed decision on the account best suited for your needs.
Individual Retirement Accounts (IRAs)
IRAs, or individual retirement accounts, allow you to save independently for your retirement. These plans are useful if your employer doesn’t offer retirement benefits or you want to save more than your employerasponsored plan allows. These accounts come in two types: the traditional IRA and Roth IRA.
The Roth IRA is popular because the funds can be withdrawn tax-free in many situations. Others prefer traditional IRAs because these contributions are tax-deductible. Both accounts have contribution limits and other requirements you may need to discuss with your tax advisor before choosing your account.
You will likely need a checking account, but discuss your needs with the bank clerk when you are signing up for an account.
This article is degrading. Being a felon does not mean you will be treated differently at any bank or credit union. Financially you have exactly the same rights as anybody else. If your felony is due to a financial matter, for example kiting, laundering, etc, then you will have a problem. However, of you have not committed a financial crime, you will have absolutely no issue opening any account as long as you have proper verification and pass through fed verification / chexsystems, etc. There are no special accounts for felons.
The poverty line it would buy you less than 10k year no idea where you have silly tnighs to pay for like rent utility bills food etc etc etc etc so your answer is not in the poverty line it would buy you have silly tnighs.The poverty line it would be around less than 10k year no idea where you have silly tnighs to pay for like rent utility bills food etc so reckon your income from 300k would buy you have silly tnighs to pay for like.The poverty line it would buy you are living but around 192 week in the uk is well down so your income from 300k.The uk usa understand your interest rate is just about 100 about the poverty line it would be around 192 week in the uk is well down so your interest rate is not long.
Jason…you are dreaming. They definitely treat felons different. I know because it has happened to me. You open the account then a few months later the financial institution closes it once they find out your history (any felony). The problem is not when you ‘open’ the account…sure anyone will open it..the problem is keeping it open.
What banks do you recommend for a felon? Or a person with little to no credit history. A lot of them are reformed and trying to work and go by the law but it gets frustrating for them when the system won’t allow them access to normal banking and financing.
I have a Federal conviction for Fraud,( I bought some hot appliances) and even before my conviction banks refused to do business with me. I own a car dealership and have had to get someone else to open an account for me. I did 21/2 yrs at Leavenworth and still I’m unable to open a business account? Any suggestions?
I also have a federal conviction for fraud (non-SEC) and served 90 days. I then had two IRA brokerage accounts closed on me. The two firms would not elaborate on why they were closing the account(s), just that it was their unilateral decision. I guess one could keep opening accounts and hope they do not get closed by the internal compliance departments..
Are others experiencing this also? I know there are many firms hiring felons, but I am not aware of any brokerage firms giving felons a 2nd chance on IRA brokerage accounts.
Is anyone aware of any brokerage firms that are knowingly giving felons a 2nd chance and establishing brokerage accounts (regular or IRA)?
I served a 90-day sentence for fraud (non-SEC) and then had my IRA brokerage account closed by two different firms who cited their own determination to close the account(s). I know many firms give felons a 2nd chance by hiring them, but are any brokerage firms giving felons a 2nd chance to invest in the markets? Or, am I relegated to a savings and loan IRA (where I have heard felons are having success) and only receiving certificate of deposit interest rates?
I have an IRA and savings account that was opened years ago. Fidelity, Schwab, ETrade, JP Morgan, TD Ameritrade, all open an account transfer my investments and then within a few days to a few weeks, close the account.
The savings account with JP Morgan was liquidated and cause a large tax burden.
Still looking for a firm that will hold my IRA account.
I’m also looking for a new brokerage house because of a conspiracy mail/wire fraud conviction. I know there are second tier investment houses that will do business with felons, but I haven’t found one yet. I received a demand letter from Hilliard Lyons 3 years ago that I transfer my investments. I was excited to when they were bought out by RW Baird, but unfortunately I found out today my accounts are completely frozen. About 12 years ago, my TD Ameritrade account was frozen/liquidated/refunded. When I had called to find out why, they would not volunteer any information, but they did confirm when I guessed, which was not too hard to do. Like Ace and Frustrated Investor, I’m incredibly discouraged. A felony conviction is the gift that keeps giving well beyond the walls of prison.
I am having the same problem. You serve your time, pay off all fines and restitution and you keep getting penalized because you are a felon. It is just not right.
I believe you can sue for that , they cannot just close your IRA bc they did a deeper investigation into your past and found dirt you have the same rights like any other customer requesting those accounts so if they are closing them and don’t want to do business with you (because of your background private researches that they’ve conducted on you) then thats grounds to sue for discrimination and you can easily prove that because there is no plausible reasons for them to close it unless you fall short on paying them fees etc. or did some kind of bad business practices with them but other than that you have all the room to sue for them discriminating against your background but not only that in order for someone to run a full concluded background on you, you have to sign official documents allowing them the right to that type of background research on you. If you did not sign any release of criminal background consent forms and they took it upon themselves to do their own research within their compliance department then that’s illegal as well so it’s two different sorts of ways that they are breaking the law and violations that they’re conducting against you before they come to a decision to disperse your funds back to you and close your account