Banks in Alabama that offer Free Checking Plus Second Chance Banking

Finding the best free banks in Alabama depends on your banking needs. Whether your priority is second chance checking accounts, high-yield savings, a variety of banking products, digital banking or physical branches, there is a bank in Alabama that can meet your requirements.

Take a look at the selection of FDIC-insured banks in Alabama to find the best bank to grow and keep your money safe.

10 Best Free Banks in Alabama

1. Upgrade Rewards Checking Plus

The Upgrade Rewards Checking Plus is best for debit card spending. Customers get up to 2% cash back on common everyday expenses for active accounts with a monthly $1,000 direct deposit ¹ plus many features including the following:

• $0 Minimum Opening Deposit.
• Up to 2% cash back on common everyday expenses for active accounts with monthly $1,000 direct deposit, and up to 1% cash back for other purchases².
• Optional savings account that earns 5.21% APY³.
• Customers with direct deposit can get paid up to two days early⁴.
• No monthly fees, no overdraft fees⁵, and get reimbursed for ATM fees with an active account.
• FDIC-Insured Up to $250,000.

Upgrade is a financial technology company, not a bank. Checking and savings accounts provided by Cross River Bank, Member FDIC.

2. OneUnited Bank

OneUnited Bank’s Online Checking Account is a free checking available to people in ALL STATES. OneUnited Bank is a Black-Owned Bank that offers the Black Wall Street Checking account with no monthly fee. If you’re looking for second chance banking options, OneUnited Bank’s U2 E-Checking Account is available but it has a monthly fee of $12. With OneUnited Bank customers can add cash to the OneUnited Bank Debit Card at over 90,000 locations across the country through a partnership with Green Dot^®.

Here are the checking account features:

• $25 minimum opening deposit
• No monthly fee.
• Get paid up to 2 days early with early direct deposit.
• Free Online & Mobile Banking.
• Obtain Cash, Surcharge Free at Over 35,000 ATMs Nationwide.
• Deposit checks through the mobile app.
• Free Bill Pay

3. Consumers Credit Union

Consumers Credit Union is a credit union based in Illinois with membership open to anyone regardless of where they live or work. Financial products and services include checking, savings, CDs, personal, auto and mortgage loans, small business banking, investments and financial education. The monthly free checking account is called Rewards Checking with the following features:

• Unlimited reimbursement for any and all ATM fees**
• Over 30,000 ATMs & over 5,000 shared branches
• Online & mobile banking plus bill pay
• Get paid as much as two days early with early direct deposit**
• No monthly maintenance fees, for anything

4. Bank Independent

Bank Independent is a community bank located in Alabama that offers a range of financial products and services to its customers that include checking and savings accounts, loans, credit cards, insurance and wealth management. The monthly free checking account is called Basic Checking with the following features:

• $25 Minimum Opening Deposit
• Free Debit Card & Bank Independent ATM Access
• Free Sync Digital Banking & eStatements
• Check Writing for $1 per check

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5. Synovus

Synovus is a financial institution with locations in several states including Alabama. Some of the financial products and services offered by Synovus Bank in Alabama include checking, savings, CDs, loans, small business banking, investments and insurance. They offer an account called “Free Checking” with the following features:

• $100 Minimum Opening Deposit
• Free online bill pay
• Digital banking app
• No monthly service fee no matter how much your account balance changes

6. First Bank

First Bank is a community bank with several locations in Alabama. Some of the financial products offered include checking, savings, CDs, loans, small business banking, investments and insurance. They offer several free checking accounts with the following features:

• $0 Minimum Opening Deposit
• Free FirstBank Visa Debit Card
• Free Online Banking with Bill Pay
• Unlimited Check Writing

7. Peoples Bank of Alabama

Peoples Bank of Alabama is a community bank in Alabama with several location offering a variety of financial products that include checking, savings, CDs, loans, small business banking, investments and insurance. They offer two free checking accounts with the following features:

• Online banking, mobile banking, MyCardRules, Zelle®
• Access account via Debit or ATM Card
• Overdraft Protection Options
• Check writing
• Free eStatements with images

8. Valley National Bank

Valley National Bank is a financial institution with several locations in Alabama. Financial products and services offered by Valley National Bank in Alabama include checking, savings, CDs, loans, small business banking, investments and insurance. The bank offers one free checking account called Rewards Checking with the following features:

• $100 Minimum Opening Deposit
• Online & mobile banking to access mobile deposits, Zelle, Bill Pay
• 24/7 account protection and fraud monitoring
• Access to 230+ ATMs and 200+ branches for free withdrawals and account support
• Earn $20 per month for a full year, that’s $240 in your pocket if you set-up a monthly direct deposit of $750 or more

»Want to Know How Credit Unions Are Different? Check out Credit Unions vs. Banks

9. West Alabama Bank

West Alabama Bank is a community bank with several locations in Alabama. Financial products and services offered by West Alabama Bank include checking, savings, CDs, loans, small business banking, investments and insurance. The bank offers one free checking account for students, local school personnel and enlisted military personnel called Spirit Checking with the following features:

• $100 Minimum Opening Deposit
• Free Spirit Checks
• Internet, Mobile Banking & Bill Pay
• No minimum balance
• No monthly service charge

10. First Community Bank of Central Alabama

First Community Bank of Central Alabama is a community bank with several locations in Alabama. Financial products and services include checking, savings, CDs, loans, small business banking, investments and insurance. The bank offers one free checking account called First Check with the following features:

• $100 Minimum Opening Deposit
• Debit/ATM card (upon approval)
• 24-hour online & mobile banking

List of Alabama Second Chance Banking Options

Alabama second chance checking accounts offer people with ChexSystems or Early Warning Service (EWS) records an opportunity to re-establish a banking history. There will likely be a monthly service fee associated with second chance banking accounts so take that into consideration when deciding to open a new account.

Avadian Credit Union

Avadian is a credit union in Alabama that offers second chance banking with the “e-Checking” account designed to help build financial stability.

You have access to your money through a Visa debit card, free online and mobile banking.

Azalea City Credit Union

The Opportunity Draft account is available to those looking for a second chance checking option. Along with a complimentary debit card, account holders can enjoy unlimited check writing, online account access, and access to a rewards program.

While there is no requirement for a minimum balance, a monthly fee is charged in addition to a $5 fee for new accounts.

Community Bank & Trust

Community Bank & Trust offers a checking account called “Second Slice.” The minimum required to open the Second Slice account is $100.

You get unlimited check writing, ATM Card, access to mobile banking apps, e-statements and direct deposit is available.

Family Security Credit Union

Family Security Credit Union offers a “Give Me A Break Checking Account” designed to help members with prior checking account problems re-establish their checking account history.

Members with a Give Me a Break Checking Account can apply for a regular checking account after 12 months in good standing. There is a $10 per month service fee.

First National Bank

First National Bank offers the On Us Account that comes with a free MasterCard debit card, free online banking with bill pay and semi-annual credit counseling. There is no minimum opening deposit required.

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Renasant Bank

Renasant Bank offers a wide variety of personal checking accounts, they do not use ChexSystems. All checking accounts come with Free Internet Banking; Free Online Bill Pay; Mobile Banking; and Debit Card with no monthly usage charge.

If you are looking for a Birmingham, Alabama No-ChexSystems bank this checking account may be a good fit for you. Renasant Bank also has locations in MS, TN, GA, and FL.

United Bank

United Bank offers the “Gateway Checking Account” provides individuals who have faced financial challenges in the past with a new opportunity to access top-notch banking services, rebuild their credit, and take a significant step towards unlocking further possibilities.

The Gateway Checking account features online bill pay for $5.05, mobile check deposit for $2 per deposit, telephone banking 24/7, itemized statements and e-statements and a monthly service fee of $10.

Woodforest

Woodforest offers a “Second Chance” account. The minimum opening deposit is $25.00. There is a monthly service charge which breaks down as follows:

• $9.95 with direct deposit
• $11.95 without direct deposit
• $9.00 one-time account set up fee.

Pros and Cons of Second Chance Banking

According to a report by the Federal Deposit Insurance Corporation (FDIC) in 2021, around 4.7% of households in Alabama were considered unbanked.

The unbanked have an opportunity get back on track at banks and credit unions that offer second chance banking but be sure to consider the pros and cons of second chance checking accounts:

Pros:

• Opportunity to rebuild your banking history. A second chance checking account gives you a chance to rebuild your banking history and demonstrate that you can manage your finances responsibly.
• Access to banking services. With a second chance checking account, you can still access essential banking services, such as direct deposit, online bill payment, and ATM withdrawals.
• Lower fees than traditional banks. Second chance checking accounts often have lower fees than traditional banks, making them more affordable for individuals who may be struggling financially.

Cons:

• Limited checking writing. Second chance checking accounts may come with limited checking writing or no checking writing feature. 
• Lower withdrawal limit. Account holders may be limited in the amount they can withdraw from ATMs.
• No overdraft protection. Overdraft protection that involves extending customers a line of credit may not be an option for second chance account holders.

Second chance checking accounts can be a useful tool in rebuilding your banking history. However, it’s important to compare the fees and features of different accounts to ensure you’re getting the best deal.

Upgrade Disclaimers

¹ Active Accounts with a monthly direct deposit of $1000 are eligible for additional benefits on Rewards Checking Plus such as additional cash back rewards, ATM fee reimbursement, and more. See the Active Account page for more information.

² Rewards Checking Plus customers who set-up monthly direct deposits of $1,000 or more earn 2% cash back on common everyday expenses at convenience stores, drugstores, restaurants and bars – including deliveries – and gas stations, as well as recurring payments on utilities and monthly subscriptions including phone, cable, TV and other streaming services, and 1% cash back on all other debit card purchases. 2% cash back is limited to $500 in rewards per calendar year; after $500, customers earn 1% cash back on all eligible debit card purchases for the remainder of the year. Rewards Checking Plus accounts with less than $1,000 in monthly direct deposits 60 days after account opening will earn 1% cash back on common everyday expenses and 0.50% cash back on all other eligible debit card purchases. Some limitations apply. Please refer to the applicable Upgrade VISA® Debit Card Agreement and Disclosures for more information.

³ The 1.5% Annual Percentage Yield (APY) for the Performance Savings account is effective as of June 1, 2023. The APY for the Performance Savings account is variable and may change at any time. Active Accounts qualify for 5.21% APY with monthly $1000 direct deposit. The APY for Active Accounts is effective as of September 1, 2023, is variable, and may change at any time. Please refer to the applicable Cross River Bank Performance Savings Deposit Account Agreement and Truth in Savings Disclosure. To earn APY, you must open and fund a Performance Savings account. Rewards Checking Plus accounts do not earn APY.

⁴ Early direct deposit requires set up of recurring electronic direct deposit from your employer, payroll, or benefits provider and is limited to direct deposits under $5000. Early access to direct deposit funds depends on the timing in which we receive notice of impending direct deposit, which is generally up to two days before the scheduled deposit date.

⁵ There are no overdraft fees or annual fees associated with Rewards Checking Plus accounts. Rewards Checking Plus charges no ATM fees, but third-party institutions may charge you a fee if you use their ATM/network or if you use your Upgrade VISA® Debit Card internationally. For Active Accounts, Upgrade will rebate ATM fees charged by another institution for debit card withdrawals in the United States, up to five times per calendar month. To be eligible to receive third-party ATM fee rebates in any calendar month for eligible ATM withdrawals made during that month on a Rewards Checking Plus account, the account must be an Active Account in the prior calendar month. See the Active Account page for more information. As a courtesy to new customers, Upgrade will provide third-party ATM fee rebates for 60 days after account opening regardless of account user status. Some limitations apply. Please refer to the applicable Cross River Bank Checking Deposit Account Agreement and Upgrade VISA® Debit Card Agreement and Disclosures for more information.