A growing number of banks are launching checking accounts, without the checks.
CitiBank ( is the latest to introduce a checkless account, with the launch of its new Access Account announced on Tuesday. )
The move is in response to an ongoing decline in check use, with a recent survey of 2,500 random consumers confirming what the bank had long suspected: that well over half, or 65%, of U.S. consumers either don’t own a checkbook or prefer not to use checks — opting for online or mobile payment tools instead.
Along with being check-free, Citi’s new account doesn’t allow customers to overdraw their accounts and incur fees. Overdraft fees have been a big concern among consumer groups, with the Consumer Financial Protection Bureau recently reporting that even the smallest purchases are leading to overdraft fees of more than $30. In order to avoid scrutiny, some banks have been changing their policies and shifting away from these programs.
Citi’s Access Account, for example, will simply deny a transaction if you try to make a purchase but don’t have enough money in your account, rather than letting it go through and triggering an overdraft fee. And since you can’t write checks, you can’t trigger an overdraft charge by writing one for more than you have in your account.
The account charges a $10 monthly fee that is avoidable if you meet certain requirements, like setting up a direct deposit or maintaining a monthly balance of at least $1,500.
Other banks have had the same idea. Bank of America ( introduced the )Safe Balance account earlier this year, which comes with everything a traditional checking account does except the checks. And like Citi’s new account, the Safe Balance account doesn’t allow customers to overdraw their accounts. Meanwhile, banks like Chase have introduced prepaid cards as checkless alternatives.
This shift isn’t totally selfless on the part of the banks. Banks save a significant amount of money by not providing boxes of paper checks to customers, says Greg McBride, CFA and vice president of Bankrate.com.
And for the minority of customers who don’t want checks to disappear, don’t fret. It’s still easy to find an account that offers them, and it’s unlikely that they will be phased out entirely any time soon.
“Check writing is in perpetual decline — and continued online and mobile innovation will only hasten the demise — but it will still be a while before checks disappear completely,” said McBride.