What is a Lifeline Account?
A streamlined checking or savings account designed for low-income customers often is referred to as “lifeline accounts.” These accounts will usually have low balance requirements and no monthly fees, and are offered by large banking institutions as a way to offer basic banking services to the broad public. Some states mandate that lifeline accounts be available within the state.
Basic features such as check writing will usually be available, but will typically be limited by a monthly quota. Other electronic services may also be limited unless the account holder pays additional fees.
Understanding Lifeline Accounts
A basic or lifeline bank account goal is to bring all members of a society into the economy by encouraging saving and long-term investing. Low-income citizens are often ignored in the economy because they don’t have a lot of disposable income, but by fostering their long-term financial health, they can become bigger contributors down the road.
Types of Lifeline Accounts
Lifeline accounts are not always called lifeline accounts but sometimes referred to as a basic checking or saving account. The idea behind any of these types of accounts is to bring in first-time customers or low-income customers. These types of accounts do not nickel and dime the account holder in fees.
Example of Lifeline Account
For example, Bank of America offers what it calls a SafeBalance Banking account. This account has no overdraft fees, provides a debit card instead of checks, and offers a predictable monthly maintenance fee, according to the Bank of America website.