No-check checking cuts down on bank fees, provides option to those who don't like checks

CLEVELAND - Banks are reaching out to people who don't usually use banks by making it easier -- and cheaper -- to manage a checking account.

Dino Wilcox knows all too well the pitfalls of check cashing centers. But when he came up short on cash recently, he decided he didn't have any other choice.

"This is just outlandish the stuff they are doing with the fees they charge, but you don't know it when you are in the situation and you need money -- you are going to do it," he said.

Banks are reaching out to people who don't usually use banks by making it easier -- and cheaper -- to manage a checking account. The latest product is the no-check checking account.

"We designed it that way primarily for folks who used other checking accounts and don't like unpredictability of fees that might come when you bounce a check," said Michael Griffin, senior vice president of community development banking at Key Bank.

With a no-check checking account, you can often use an ATM without fees, have your paycheck deposited directly, pay bills online and do most of the things you would normally do with a checking account -- except write a paper check. It's similar to a pre-paid debit card, but a checkless checking account typically carries fewer fees and is backed by the FDIC. 

Charges vary from bank to bank. For example:

- Key Bank waives the $5 monthly fee altogether after two transactions that month.
- Fifth Third 's checkless checking carries no service charge, but requires monthly direct deposits of at least $500.
- Chase charges $4.95 a month for the service, but adds no fees for deposits, withdrawals, inquiries or transfers.

The Neighborhood Progress Group in Cleveland offers several free classes to help people explore financial options like no-check checking.

"I think it's a great product for the underserved, un-banked population. They need something that will help them keep their dollars in their pocket, and have control of their dollars," said Beverly Davis, NPI's financial education manager.