It’s back to school time!
And this year over 20,000 students will head off to college. For some it’s their first time leaving home and managing money. So selecting the right student checking account is important. Banks and credit unions create special accounts for students with features tailored to a young adult’s lifestyle.
But before dashing to the bank to open an account, it helps to have a few pointers on what to look for.
It happens. A student is away at college, makes a mistake and overdraws their account. Select a student checking account that offers a “forgiveness plan.” With this type of plan the account allows students to avoid penalty for overdrawing their account the first time. Plus, the financial institution waives the non-sufficient funds fee (NSF fee), which can be $25 or more.
Usually accounts offer this for the first time only, so it’s important for students to manager their money carefully.
For students, bank balances should be able to go low without penalty. Ask about fees charged for balances dipping below a specific level. Ideally, there won’t be any fee at all, making the account free. Some bank accounts require a $50 opening deposit. But after the initial deposit students aren’t required to keep a minimum balance.
Students travel. They might be traveling home for breaks, out of the area for a school trip, or abroad for study. When shopping for a student account, consider out-of-network ATM use. For example, some credit unions belong to a co-op network, allowing you to use other credit union’s ATMs across the nation, at no-cost. Also, ask about other special fees, such as wiring money or using a bank branch.
Related: Read the 5 things to consider before choosing a credit union.
High Tech Features
Students are wired. They do most everything online, so high tech features are important. Shop for an account with high tech features, which allow for easier account management. For example, some financial institutions allow students to set up email alerts for low balances, deposits or large account withdrawals.
There’s also online banking features, allowing students to schedule bill payments on a regular cycle. For example, if rent is due on the 1st, a student can schedule the payment to reoccur monthly, reducing the risk for late fees. They can now even set up text-reminders of upcoming due dates as well!
Have you opened a new student checking account this summer? If so, tell us about it!