Reimagining Checking for Gen Z

Younger consumers rarely write checks, and “checking account” no longer fits their digital-first money habits.

By: Kari Anne Arnosk, Senior Strategic Consultant, Advisors' Plus
​Originally featured on Velera’s blog

Financial service providers are zeroing in on Gen Z, seeking to understand how they spend, what they expect from their banking experience and how they prefer to engage. What earns their trust? What drives their loyalty? These insights are critical to designing a smarter banking experience that truly resonates with the next generation. 
 
How Big Is the Gen Z Opportunity? 
Gen Z represents a transformational growth opportunity for credit unions. With nearly 75% of new demand deposit accounts (DDAs), traditionally called checking accounts, being opened by Gen Z consumers, this group is rapidly becoming the dominant force in member growth. Securing their checking account is more than a win it’s a gateway to capturing their primary payments relationship. 
 
But today’s younger consumers rarely, if ever, write checks. Their financial lives revolve around digital wallets, mobile apps and instant payments. The term “checking account” feels outdated and disconnected from how they actually manage their money. Forward-thinking financial institutions are shifting to a more consumer-friendly term, “spending accounts,” to better articulate how those accounts are being used. 
 
 “A couple of years ago, we rebranded our checking accounts [as] ‘Spending Accounts.’ We feel if we are in the front of spend, we have you. But if you’re spending out of a Wells [Fargo] or [Bank of America] account, we don’t have you.” 
– Joan Opp, President and CEO of Stanford Federal Credit Union
 
On average, Gen Z members generate approximately 50 card transactions per month and about $3,300 in total monthly spend across debit and credit cards. This level of engagement translates into significant payment insight and long-term value. Credit unions that prioritize Gen Z are positioning themselves for sustained relevance and growth in a rapidly evolving financial landscape.
 
The Challenge
Gen Zers are twice as likely as other members to leave their credit union. According to Velera’s Credit Union Growth Outlook, Gen Z is “more open to exploring unfamiliar and complex financial products than previous generations. They feel comfortable with evaluating multiple options and selecting the combination of providers that best meets their needs.”  While it’s common to initially inherit banking preferences from parents, Gen Z has a virtual smorgasbord of spend account options – and are willing to shop around for the best value among neobanks, digital banks and large financial institutions for value and relevance. 
  
Competitors recognize the importance of Gen Z and have built strategies to win their business. For credit unions, engaging with this key growth segment isn’t optional – it’s essential to accelerating long-term member relationships and market relevance. Let’s take a lesson from our competitors and learn how they are crafting unique strategies that resonate with Gen Z and drive primary relationships. 
 
Neobanks: The Direct Deposit Value Exchange
Neobanks like Chime and SoFi are winning Gen Z by turning direct deposit into a gateway for instant value. With perks like early paycheck access, sign-up bonuses, $200 overdraft coverage and access to high-yield savings, direct deposit isn’t just a feature – it triggers deeper financial engagement. And the appeal doesn’t stop there. Gen Z gravitates toward fee-free banking: no monthly fees, overdraft charges or non-sufficient funds (NSF) fees. It’s not just about saving money; it’s about fairness, transparency and financial empowerment. These are values Gen Z lives by – and neobanks reflect them. Best of all? Gen Z can explore options, compare benefits and open an account in minutes from their phone. It’s fast, frictionless and built for how they live.
 
“I have switched [financial institutions] for a new [checking] account sign-up bonus that offered a higher yield savings account – all I needed to do was set up direct deposit.” 
– Gen Zer interviewed by Velera
 
Digital Banks: Debit Card Rewards That Deliver
American Express and Discover attract Gen Z by blending financial rewards and $0 monthly fees (including $0 overdraft and NSF fees) with a digital-first experience. American Express Rewards Checking attracts Gen Z by combining premium digital banking features with debit card rewards (one point for every $2 on all debit purchases) – all while leveraging the brand’s reputation for service and innovation. Discover positions its CashBack Checking as a low-risk, high-reward entry point into banking, offering 1% cash back on up to $3,000 in monthly debit card spend. Both programs turn everyday spending into a debit card rewards opportunity. Their strategies also encourage Gen Z to build deeper relationships across multiple financial products, including credit cards, high-yield savings and more.
 
“Incentives are big for me. I know there are better offerings out there than what I have now, so I am looking into switching. I want all the rewards and cashback as possible with a positive digital experience.” 
– Gen Zer interviewed by Velera
 
Large Banks: Life Stage Segmentation
Chase and Bank of America are shifting from traditional models to relationship-driven, wellness-focused financial design. Chase builds early loyalty with three no-fee accounts tailored to Gen Z’s life stages, while Bank of America’s SafeBalance® Spend Account – now driving nearly two-thirds of new consumer accounts – meets Gen Z’s demand for transparency and control. Backed by robust digital tools like budgeting features, Zelle® and AI-powered support, these strategies position both financial institutions to win Gen Z’s primary financial relationship for the long term. 
 
“Family Banking offers the foundation young people need for managing money, with support for parents seeking to help their children on the path to financial health and independence.”
 – Mary Hines Droesch, Head of Product for Consumer, Business and Wealth Management Banking and Lending at Bank of America
 
Gen Z Loyalty Is Fluid – Lead with a Product That Delivers Real Value
Gen Z demands transparency, digital-first convenience and lifestyle alignment from their financial providers. As active product comparers, they seek seamless, all-in-one solutions that evolve with them. To win their trust, don’t treat Gen Z as a persona; use their preferences as a strategic compass. This approach drives relevance, deepens relationships and strengthens appeal across your broader membership base.
 
Why Credit Unions Must Act Now
A well-designed spending account that naturally guides Gen Z toward products and services that support their goals is the gateway to stronger engagement and top-of-wallet status. When done right, it becomes a powerful engine for increased card usage, stronger interchange revenue and deeper member loyalty – reinforcing your credit union’s role as a trusted financial partner. 

About Velera
Velera, formerly PSCU/Co-op Solutions, is the nation’s premier payments credit union service organization (CUSO) and an integrated financial technology solutions provider. With over four decades of industry experience and a commitment to service excellence and innovation, the company serves more than 4,000 financial institutions throughout North America, operating with velocity to help its clients keep pace with the rapid momentum of change and fuel growth in the new era of financial services. Velera leverages its expertise and resources on behalf of credit unions and their members, offering an end-to-end product portfolio that includes payment processing, fraud and risk management, data and analytics, digital banking, instant payments, strategic consulting, collections, ATM and POS networks, shared branching and 24/7/365 member support via its contact centers. For more information, visit velera.com.