November 20, 2018

How to Get the Most Out of a Student Checking Account

Best Student Checking AccountsMany banks and credit unions are offering better deals on checking accounts to students who decide to open an account. Some such benefits for young adults include lower fees, lower minimum balances, and different variations of a forgiveness plan that allows students to recover from first-time overdraft mistakes. From a banks perspective these incentives work well for both parties, mostly because a having a student sign up often leads to having a lifelong customer. If you are currently enrolled in school and you would like to open your first checking account, here are some of the things you should look for.

Low (Or No) Minimum Balance

Since many students do not have a regular means of income there probably won’t be a whole lot of money in the checking account at any one time. This means students will want to open an account with the lowest minimum balance possible so that they won’t have to pay the fees that come with going below the minimum. Of course there is nothing that can prevent the fees from bounced checks and overdrawing on the account repeatedly. Alternatively some banking institutions will require a minimum balance to open the checking account but then not require a minimum to be held in the account.

Free Debit Cards and Checks

The more you can get for free as a student, the better. Some banks will offer free student checking accounts with no monthly fees attached, free checks, and free debit cards that don’t charge you to use them. Just know that you usually can’t get everything for free, so be on the lookout for fees associated with wire transfers or penalties for ATM withdrawals that are out of the network. Before opening any account make sure you know what is free and what comes with penalties.

First-Time Forgiveness

It is easy for a lot of students, who have never had to worry about money much before, to make mistakes with their checking accounts. Those not used to monitoring their transactions may find themselves spending too much and consequently overdrawing on the account. Usually when an overdraft occurs there is a $35 non-sufficient funds (NSF) fee. The best banks allow students to overdraw on the account one time without penalty, and many will allow students to link up their savings accounts and other lines of credit to the checking account. This enables overdrawn accounts to have money switched over without having to pay the NSF fee (though there is usually a smaller transfer fee). But banks keep the safety net relatively small because they don’t want students to begin misusing this sense of security.

Online Banking Features

Online banking is a great tool for a generation raised on computers and the Internet. Some features associated with online checking accounts allow students to check their account statements, pay bills, and manage their money all on the web. Most students also have smartphones now, and they can have alerts and text messages sent to them when bills are due or if there account balance is getting low. Mobile banking is a fantastic resource, especially for students who go to school in other cities outside of their hometown. Another advantage of online banking is the ability to have money moved from their checking to savings account on a regular basis automatically.

Convenience and Proximity

Mobile BankingThis goes along with mobile banking, because banks that offer online services will always be more convenient and efficient than those that do not. But students should also think about other things, such as the availability of Automatic Teller Machines. Choosing a bank that has ATMs on campus and in the nearby area means students won’t have to worry about paying out-of-network usage fees. Another area of convenience is students having checking accounts at the same bank their parents use. This makes it a lot easier for parents to deposit funds for school, monthly expenses, or emergencies.