More than 13 million Americans receive SSI or SSDI benefits, and nearly all of that money flows through traditional bank accounts that weren't designed with them in mind. The result? Banks collect billions in fees from some of the most financially vulnerable people in the country — while offering almost nothing in return.
In this article, we'll cover:
- How banks profit from disability benefit recipients
- The overdraft fee trap and why it hits fixed-income households hardest
- Why banks have no incentive to help you stay compliant with SSI rules
- How the lack of specialized banking tools puts your benefits at risk
- What disability-focused banking actually looks like
The Overdraft Machine
Banks in the United States collect tens of billions of dollars in overdraft and insufficient funds fees every year. And research consistently shows that these fees fall disproportionately on people with low balances and fixed incomes — exactly the profile of most SSI and SSDI recipients.
Here's how it works. You receive your SSI payment of $994 on the first of the month. You pay rent, utilities, and a few other essentials. By mid-month, your balance is running low. A subscription auto-renews, a charge you forgot about hits your account, and suddenly you're negative. The bank covers the transaction — and charges you $35 for the privilege.
If multiple charges come through that same day, many banks will charge you $35 for each one. In a single day, you could lose $100 or more in fees on transactions that might have totaled $30 in actual spending. That's money directly out of a benefit check that's already stretched thin.
The banks know exactly who is most likely to overdraft. They know when benefit checks arrive, they know the typical spending patterns, and they know that people on fixed incomes don't have a cushion to absorb the hit. But overdraft fees are enormously profitable, so there's little incentive to change.
You're a Customer, Not a Priority
Traditional banks make money in a few key ways: interest on loans, investment returns on deposits, and fees. For a customer with a $994 monthly SSI deposit and an average balance that hovers near zero, the first two revenue streams are negligible. That means fees are how the bank makes money on your account.
This creates a fundamental misalignment. The bank's financial incentive is to charge you fees. Your financial need is to avoid them. Nobody at your bank is thinking about whether your account balance is approaching the $2,000 SSI resource limit. Nobody is building tools to help you categorize spending as a representative payee. Nobody is alerting you that a lump sum back payment might temporarily push you over the threshold and trigger a benefits review.
That's not because bank employees are bad people — it's because the system wasn't built for you. Traditional banking infrastructure is designed for customers who earn regular wages, build savings over time, and borrow money. It doesn't account for the unique constraints of living on government benefits.
The Compliance Gap
For SSI recipients, the stakes go beyond fees. The $2,000 resource limit ($3,000 for couples) means your bank balance is directly tied to your eligibility. Exceed that limit — even temporarily — and Social Security can suspend or terminate your benefits.
Most banks have no mechanism to help with this. They don't know what the resource limit is. They don't track your countable resources. They can't distinguish between countable and excluded resources. They have no way to alert you when you're getting close.
This means the burden falls entirely on you. You have to manually track your balance, understand which assets count, know the timing of deposits and withdrawals, and make sure you never accidentally go over. One mistake — a delayed rent payment, a retroactive benefit adjustment, a gift from a family member — and you could face an overpayment notice or a loss of benefits.
For representative payees managing benefits on behalf of someone else, the challenge is even greater. You're legally responsible for spending those funds appropriately, keeping records, and filing annual reports with Social Security. A traditional bank gives you a checking account and a statement. It doesn't give you the tools to actually fulfill your fiduciary duty.
What Disability-Focused Banking Looks Like
A bank account designed for disability benefit recipients should start from a fundamentally different premise: that protecting your benefits is just as important as holding your money.
That means building in resource monitoring so you can see at a glance whether you're approaching the SSI limit. It means providing spending categorization so representative payees can easily track how benefits are used. It means eliminating the predatory fee structures that drain fixed incomes. And it means understanding the rules — SSI vs. SSDI, resource limits, ABLE account interactions, reporting requirements — so the tools actually match the reality of your financial life.
This isn't a niche need. Millions of Americans navigate these rules every day, and they deserve banking that works with them rather than against them.
The Bottom Line
Traditional banks aren't set up to serve disability benefit recipients well. The fee structures punish people on fixed incomes, the compliance tools don't exist, and the incentives run in the wrong direction. It's not that banks are deliberately trying to harm disabled Americans — it's that the entire model was built for a different customer, and nobody rebuilt it for you.
Until now.
Purple was built from the ground up for SSI and SSDI recipients and their families — with resource tracking, compliance tools, and no hidden fees that eat into your benefits.