Choosing a bank account when you're on disability benefits isn't just about convenience—the wrong account can drain your limited income with fees or even put your benefits at risk. Here's how to find an account that works for your situation.
In this article, we'll cover:
- Features that matter most for disability recipients
- Red flags and fees to avoid
- The difference between prepaid cards and bank accounts
- Special considerations for SSI recipients
- Why accounts designed for disability benefits exist
Features That Matter for Disability Recipients
When you're living on a fixed income, your bank account needs to work harder. Look for accounts with no monthly maintenance fees (or fees that are waived with direct deposit), no minimum balance requirements, free ATM access or ATM fee reimbursement, no overdraft fees or the ability to opt out of overdraft, and easy access through mobile banking.
For SSI recipients, consider whether the account offers any tools to help you track your balance relative to resource limits. Accidentally exceeding $2,000 in resources can cost you your benefits, so visibility matters.
Red Flags and Fees to Avoid
Traditional banks often profit from fees that hit fixed-income customers hardest:
Monthly maintenance fees of $10-15 can add up to $180 per year—money taken directly from benefits meant to cover necessities.
Minimum balance requirements create a catch-22 for SSI recipients: you need to keep money in the account to avoid fees, but keeping too much risks exceeding resource limits.
Overdraft fees averaging $30-35 per incident can cascade when you're living paycheck to paycheck, creating a debt spiral from a single miscalculation.
ATM fees from both your bank and the ATM owner can cost $5+ per withdrawal, punishing people who need cash for daily expenses.
Read the fine print before opening any account. If the fee schedule is complicated or hard to understand, that's often a sign the bank profits from customer confusion.
Prepaid Cards vs. Bank Accounts
Many disability recipients use prepaid debit cards like Direct Express to receive benefits. While convenient, prepaid cards have limitations:
Prepaid cards typically don't build your banking history, may have withdrawal limits and fees, offer limited customer service and dispute resolution, and don't provide the full features of a checking account.
A true bank account gives you more control, better consumer protections, and access to services like online bill pay, mobile check deposit, and the ability to set up automatic payments.
Special Considerations for SSI Recipients
If you receive SSI, your bank account balance counts toward the $2,000 resource limit. This creates unique challenges:
You need an account that lets you easily monitor your balance and doesn't require you to keep minimum amounts that could push you over limits. Ideally, you want visibility into where you stand relative to SSA's thresholds.
Be cautious about accounts that encourage saving or round up purchases into savings—while great for most people, these features can inadvertently push SSI recipients over resource limits.
Why Specialized Accounts Exist
Standard banks weren't designed with disability recipients in mind. They optimize for customers with higher balances and more transaction volume—not people carefully managing $900 per month while navigating complex eligibility rules.
Accounts designed specifically for disability recipients understand these challenges. They eliminate fees that punish low balances, provide tools relevant to benefit management, and offer support from people who understand programs like SSI and SSDI.
The right account doesn't just hold your money—it helps you manage your benefits and stay compliant with the rules that affect your eligibility.
Your bank account should work for you, not against you. Purple is built specifically for SSI and SSDI recipients, with no hidden fees and tools designed for your needs.