A draft account is not a checking account—it's a limited account that lets you write checks but doesn't give you the full features of a traditional checking account
A draft account is a bare-bones account designed to let you write checks without the deposit insurance, overdraft protection, or debit card access that come with a standard checking account. Banks and credit unions offer them mainly to people who have been denied a regular checking account, often because of a history with ChexSystems (a banking record system that tracks closed accounts and fraud). You can deposit money, write checks, and withdraw cash at the teller window, but you cannot use a debit card, set up automatic bill pay, or link the account to online banking in the way a checking account does.
The trade-off is lower cost—many draft accounts have no monthly fee or a very small one—but also fewer ways to access your money. If you need to pay a bill online or make a purchase without writing a check, a draft account will not work for that. Some people use a draft account as a stepping stone back to a regular checking account after their banking record improves.
Key Takeaways
- A draft account lets you write checks and deposit money but does not include a debit card, online bill pay, or overdraft protection.
- Draft accounts are often offered to people who have been denied a regular checking account due to ChexSystems records or past banking problems.
- Most draft accounts charge little or no monthly fee because they require fewer services from the bank.
- You can withdraw cash at a teller window or ATM (if the bank offers ATM access), but you cannot make online purchases or use automatic payments the way a checking account holder can.
Why banks offer draft accounts instead of regular checking
Banks use draft accounts as a middle ground between refusing someone entirely and opening a full checking account. If ChexSystems shows that you closed an account with a negative balance, wrote bad checks, or had fraud on a previous account, many banks will not open a standard checking account for you. A draft account lets the bank take less risk while still letting you handle money through checks.
The account also protects the bank because it limits what you can do. Without a debit card or online access, there are fewer ways for fraud to happen. Without overdraft protection, the bank does not have to cover checks that bounce. From the bank's perspective, a draft account is simpler to manage and cheaper to offer than a full checking account with all the protections and features.
What you can and cannot do with a draft account
| Feature | Draft Account | Regular Checking Account |
|---|---|---|
| Write checks | Yes | Yes |
| Deposit money | Yes | Yes |
| Withdraw cash at teller | Yes | Yes |
| Use a debit card | No | Yes |
| Set up automatic bill pay | No | Yes |
| Online banking access | Limited or none | Yes |
| Overdraft protection | No | Often yes |
| FDIC deposit insurance | Yes (up to $250,000) | Yes (up to $250,000) |
The main limitation is that you cannot use a debit card with a draft account. This means you cannot swipe or tap to pay at a store, pump gas, or make online purchases. You also cannot set up automatic bill payments through the account, so you will need to mail checks or pay bills in person.
Some draft accounts do offer limited online access—you might be able to check your balance or view transactions—but you cannot initiate transfers or payments from the website. ATM access varies by bank; some draft accounts come with an ATM card that lets you withdraw cash, while others require you to go to a teller window.
How to move from a draft account to a regular checking account
If you have a draft account because of ChexSystems, your goal is usually to rebuild your banking record so you can move to a regular checking account. The path depends on why you were denied in the first place. If the issue was a closed account with a negative balance, you may need to pay that balance first—contact the bank that closed the account and ask what they need to clear the record.
Once you have addressed the past problem, use the draft account responsibly for several months: deposit money regularly, never bounce a check, and keep a positive balance. After six months to a year of clean activity, contact your bank and ask whether you now meet the requirements for a regular checking account. Some banks will upgrade you automatically; others require you to apply again.
If your current bank will not upgrade you, try a different bank or credit union. Smaller banks and credit unions sometimes have less strict ChexSystems policies than large national banks. You can also check your own ChexSystems record at chexsystems.com to see what information is being reported about you.
Costs and fees for draft accounts
Most draft accounts charge no monthly maintenance fee or a very low one—often between $0 and $5 per month. Some banks waive the fee if you maintain a minimum balance, usually $100 to $500. Check with your specific bank for their fee structure, as it varies.
You may also face fees for things like overdrafts (if a check bounces), stop payments on a check, or requesting a copy of a cancelled check. ATM fees apply if you use an out-of-network ATM. These fees are typically the same as they would be on a regular checking account, so the main savings is the lack of a monthly maintenance fee.
Draft accounts versus second-chance checking accounts
A second-chance checking account is similar to a draft account but usually comes with slightly more features—often including a debit card and online banking access. Second-chance accounts are designed for people with banking problems in their past, just like draft accounts, but they offer more functionality. The trade-off is that second-chance accounts often cost more per month, sometimes $10 to $15.
Whether a draft account or a second-chance account makes sense depends on what you need. If you primarily pay bills by check and rarely need a debit card, a draft account's lower cost may be worth the limitation. If you need to make online purchases or use automatic bill pay, a second-chance account is more practical, even if it costs more.
Frequently Asked Questions
Can I get overdraft protection on a draft account?
Most banks do not offer overdraft protection on draft accounts. If a check bounces, you will be charged an overdraft fee, and the check will not be paid. This is one of the main ways draft accounts differ from regular checking accounts.
Will a draft account help me rebuild my credit?
A draft account itself does not report to credit bureaus, so it will not directly improve your credit score. However, using it responsibly and eventually moving to a regular checking account can help you rebuild your banking history, which may make it easier to get other financial products in the future.
Can I use a draft account for direct deposit?
Yes, most draft accounts accept direct deposit. You can provide your employer or benefits administrator with your account and routing number, and they can deposit your paycheck directly into the account. This is one of the few electronic transactions a draft account typically allows.
What happens if I write a check for more than I have in my draft account?
The check will bounce, and you will be charged an overdraft or non-sufficient funds (NSF) fee, usually $25 to $35. The person or business you wrote the check to will also be notified that the check was not paid. Unlike a regular checking account with overdraft protection, the bank will not cover the difference.
How long does it take to upgrade from a draft account to a regular checking account?
There is no set timeline. It depends on your bank's policies and how long you have been using the draft account responsibly. Some banks may upgrade you after six months of clean activity; others may require a year or more. Contact your bank to ask what their specific requirements are.