It seems that every day we hear about one bank or another being either at the brink of failure or otherwise riddled with controversy. For years now, the ongoing topic of debate over the American economy has centered around the role of a few central banks with corporate management in the crosshairs of conspiracy theorists and legal analysts alike. If you’re an American reading this article, there’s a good chance you have at least one account with one of these institutions.

More recently, banks have come under fire for charging more and more fees for everyday tasks that many would consider to be complementary. Withdrawing funds using an ATM card, purchasing something with your debit card, and even transferring funds from one account to another are processes everyday people go through on a daily basis. Some banks have slowly adopted small fees for these minor processes which can eventually add up to a significant amount of cash over a relatively short period of time.

Just this past year, it was revealed that Bank of America was intending to impose a $5 monthly fee to customers wishing to use a debit card. This decision was later reversed after outrage from customers over the fee became a focus of the media. An online petition yielded over 300,000 signatures demanding that Bank of America reverse its decision. Chase and Wells Fargo have reportedly also backed off from any plans to charge a monthly fee for debit card usage.

So, what are your alternatives? How do you avoid a traditional checking/savings account that could be subject to a wide range of fees? Here are some ideas.

Credit Unions

Credit unions are very much like a bank, with some extremely important differences. For one, credit unions are owned by the customers and not by a for-profit company. Many credit unions offer the same range of services from standard checking and savings accounts to short and long term loans. What makes them different is that they typically have some added benefits to the user.

For example, each member of a credit union is often given some voting powers when it comes to decisions made that impact the customers. Being able to help decide on any major changes makes it far less likely that new fees and other undesirables would be imposed. Add to that the fact that credit unions are often formed around a common interest between members, and you’ve got a financial institution that is better suited to meet your needs.

Credit unions have their own downsides. For example, they tend to be smaller institutions meaning that certain luxuries such as ATMs and offices may be harder to find outside of their core service area. This may result in fees charged by other banks that support ATMs in a given area.

Cash Management Account

For those of you that still prefer a larger institution, but don’t want a traditional checking or savings account, you might consider a cash management account. These accounts are sort of a hybrid between a standard checking account and a brokerage account.

One of the benefits of this type of account is that it typically comes with interest even if you don’t actively participate in purchasing bonds, stocks, and other commodities. Account holders are generally issued checks in addition to a debit card that can be used just like any other standard checking account as long as a balance remains.

The downside of these account is that banks tend to require a higher starting deposit than they would with a standard checking/savings account. This is a viable option for folks that just want access to their accrued wealth while enjoying the freedom of managing investments.


PayPal is a favorite among the Internet savvy. As a payment gateway, PayPal serves a wide range of clientele ranging from eBay sellers and freelance writers to large companies.

As a banking alternative, PayPal may not be your first choice for building a long-term savings, but it does offer users a debit card that can be used to make purchases for everyday goods and services just as you would from a standard bank. In addition, this card also gives you immediate access to your money as opposed to the 2-5 day waiting period for an account-to-account withdrawal.

I’m a PayPal user, as are most of the folks here at LockerGnome. PayPal is a pretty reliable service that does exactly what it’s advertised to do. The folks at PayPal guarantee transactions for you along with a standard level of fraud protection. I’ve recently had an issue with iTunes that resulted in having to file a claim through PayPal. The claim was not only resolved quickly, but every dime of money that was taken was returned.

The downside of PayPal is that it isn’t technically a bank at all. PayPal reserves the right to freeze your funds and lock your account for 90 days. There are some reports online about this happening, though I haven’t personally known anyone that has ever been hit with this issue.

Precious Metals

There is one form of currency that has held its value for the past 6,000 years. Gold, silver, and platinum are some of the most common hard-currency investments you can make. Buying an ounce of .999 fine silver means that you can sell it at or above spot (the current value of the metal against the currency) later on.

Gold especially is one of those precious metal investments that tends to climb against the dollar as inflation and other factors sets in. Over the past ten years, the price of an ounce of gold has risen from roughly $300/ounce to roughly $1,700/ounce. The idea investors have in mind when getting in to precious metals is generally to have some form of wealth that could survive past a collapse of the dollar.

Consider this, the US dollar was backed by precious metals until moving off the gold standard on June 5, 1933. At that point, US currency went from being backed by gold in the treasury to a trust. The trade of gold bullion was banned in the US for decades until the 1970s when Nixon announced that the US would no longer convert gold into dollars at a fixed rate. Gerald Ford allowed the free trade of gold among citizens in 1974.

Today, gold and silver are seen as long-term investments. Whether or not that investment pays off with the sudden increase in the price per ounce remains to be seen.

Your Mattress

Perhaps one of the oldest form of bank out there is the very mattress you sleep on every night. Hiding your cash, coins, and valuables away where only you can find them is certainly an option to you. It’s been estimated that roughly 17 million Americans lived without a bank account in 2009, and that number may have grown since then.

For these individuals, there are other options out there. Buying and selling goods, getting a loan against a possession, or simply spending wisely can allow you to live completely free of a bank or other financial institution. You could also buy and recharge pre-paid credit cards using cash, giving you roughly the same freedom you might have with a standard account using a debit card. Keep in mind though, that it isn’t the same thing and some restrictions may apply.

This does come with a few downsides. Credit is harder to come by if you don’t have any form of a bank account. Paying your bills may require a little footwork to and from your local grocery store and/or post office. If you run out of money, certain services many banks offer including direct deposit advance are not available to you, making you dependent on third-party companies that cash checks or pawn items for short-term loans.

Still, it’s up to you to decide what works best for you. My personal savings portfolio consists of a mixture of a standard savings account and precious metals. What works for me may not work for you at all, though knowledge of what options are available is certainly not a bad thing.

Do you use standard checking and/or savings accounts? Have you tried any of these (or other) alternatives? What works for you?