Millions of US households don't use banks. They should reconsider.

Unbanked households, or those that don’t have an account at an insured institution, miss out on helpful tools and services such as savings accounts, secured credit cards and deposit insurance.

Jon Elswick/AP/File
A part of a US $100 bill.

Banks and credit unions offer many services that save people time and money, but these conveniences elude 8.6 million unbanked households in the United States. Instead, these families rely on alternative financial service providers for basic transactions such as check cashing, which often come with hefty fees.

Unbanked households, which the Federal Deposit Insurance Corp. defines as those that don’t have an account at an insured institution, also miss out on helpful tools and services such assavings accountssecured credit cards and deposit insurance.

Whether they don’t have a bank account by choice or circumstance, these people could save money and time by joining, or rejoining, the banking ecosystem. The reasons for not having an account vary, but each can be overcome.

They think they don’t have enough money

The main reason people don’t belong to a bank is that they think they don’t have enough money to maintain an account or meet a minimum balance requirement, according to an FDIC study.

But it doesn’t always take a certain dollar amount to qualify for a bank account; many of NerdWallet’s favorite checking accountsdon’t have initial deposit requirements. They also don’t have monthly maintenance charges, which means customers don’t have to keep their balances above a certain amount to avoid a fee.

Just as a retirement account is beneficial even if you don’t add thousands of dollars to it each month, so too is a bank account useful, even if it isn’t overflowing with cash. The account also provides access to mobile check deposit services, online bill pay and a safe place to store your money.

» MORE: The cost of being unbanked

They don’t trust banks

When less-than-stellar customer service is already testing your patience, finding out that one of the largest banks in the country opened millions of fake accounts in their customers’ names might leave you on the brink of ditching the traditional banking system altogether. For some consumers, it’s enough to keep them from joining it in the first place.

Despite the headlines, your money is safer in a bank account than under your mattress. Most financial institutions are federally insured, meaning that deposits of up to $250,000 are backed by the U.S. government. What’s more, banks dedicate plenty of resources to thwarting hackers and mitigating other online threats.

They think fees are too high or unpredictable

Costly fees keep some people away from banks — and it’s hard to blame them. If you were to pick a run-of-the-mill bank account that came with a $7.50 monthly fee, you could end up paying about $150 per year once you factor in a couple of $30 overdraft charges.

But there are solutions: free checking and savings accounts. Often, these accounts come from online institutions, which also have lower or no overdraft fees. Before you join a bank or credit union, take a good look at its fee schedule to avoid surprises.

Not having a bank account comes with its own steep costs. Prepaid debit cards, which some people use in place of a checking account, can have fees that total nearly $200 or $500 annually, depending on whether the card comes with direct deposit services, according to a NerdWallet study.

They have past banking problems

Some people’s past banking troubles, such as bounced checks or unpaid fees, keep them from being able to open a standard checking account. That’s where second-chance checking accounts come in handy.

These products may not come with all of the services offered by traditional accounts, but they eliminate the need to go to expensive alternative financial-service providers. Plus, if you use your account responsibly for six months to one year, you might be able to switch to a standard account.

» MORE: Second-chance checking accounts across the U.S.

Banks are still the best deal

If you don’t have a bank account for one of these reasons, we highly recommend re-evaluating your stance. Banks and credit unions may not be perfect, but they’re far better — and cheaper — than your other options.

Tony Armstrong is a staff writer at NerdWallet, a personal finance website. Email: tony@nerdwallet.com. Twitter: @tonystrongarm.

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