College students most likely want to make smart choices when it comes to money management in order to set themselves up for future financial success.
A favorable account for college students typically depends on personal financial needs, but the bank itself might be beneficial in more ways than imaginable.
While specific student bank accounts do exist, a beneficial account for any student will be the one that benefits them and their money the most.
How Do I Choose a Bank?
There are four main factors that might be helpful to research when choosing a new bank: fees, interest rates, location, and online access.
Something students may want to avoid is a bank that charges monthly fees for student or traditional checking accounts or requires a minimum deposit to open a new account.
Another fee to watch for is the overdraft fee, which currently averages just over $33 . For students who may not keep a lot of money in a checking account, an overdraft fee could end up being more than the total account balance.
One type of fee that might be forgotten until monthly reconciliation time is the ATM fee. Somesome banks and financial institutions will refund up to a certain amount (or sometimes all) of ATM fees each month when using another bank’s machine to withdraw cash.
If the evening’s entertainment is somewhere that only accepts cash, having an easy option to access funds could mean the difference between having fun with friends or having to sit the night out.
College students might also want to consider researching interest rates. If building up a savings account for post-college expenses or loan payments is a priority, it could be helpful to look into a bank that offers high-yield savings accounts, which typically earn a higher interest rate than checking accounts.
College location might be one of the biggest determining factors when looking for a bank. For students attending college away from home, researching banks near campus may turn up some convenient options.
Many banks and credit unions have local branches. Having an ATM nearby might also be an important factor to consider.
Some colleges may offer an on-campus bank branch or a few ATMs. Choosing a well-known bank with locations across the country may offer an advantage to being able to find a physical branch, but if that isn’t an important factor, considering which banks are near campus could be an alternative.
Another piece of the puzzle, and one that some students might seek for convenience, is online banking. Especially when choosing a bank that does not have a location near school, making sure the bank’s app or website is up to snuff could make banking transactions that much more convenient.
Some banks may offer mobile check deposit through an app, which could mean even fewer trips to a physical bank branch.
How Many Bank Accounts Should I Have?
Learning to manage money is part of becoming an adult. College students are most likely living on their own for the first time and might have little to no experience opening and using a bank account.
Having just one checking and one savings account might simplify keeping track of funds earmarked for spending and those meant for savings.
For students interested in saving for longer-term goals—maybe tucking money away for future student loan payments or emergency funds—opening another savings account could be one strategy to help reduce the temptation to think of that as available, spendable money.
Having too many accounts could become a problem if keeping track of those separate accounts becomes too much to handle on top of an already busy school schedule.
What Kind of Account Works For College Students?
Besides looking into which financial institution might work well for college students, something else to consider might be the type of institution to do business with.
Credit unions, for instance, tend to be smaller but still offer many of the same services as a big bank. They may also offer more flexibility and lower fees.
As nonprofits, credit unions are designed to serve their members, and typically pay higher interest rates on deposits and offer a more personalized experience and better customer service.
If you don’t need a brick-and-mortar bank location every two blocks, a credit union could be the right fit for college. Some credit unions also offer online and mobile banking options.
Plus, if you are using a credit union savings account, odds are you will earn higher interest, and avoid some of those other larger bank fees along the way.
Though some bigger financial institutions do offer special, college student-only accounts with lower fees or certain bonuses to help maintain a healthy budget as well.
A money management account could be another option to amp up savings and avoid fees. SoFi Money® is a cash management account that enables members to spend, save, and earn an interest rate all in one place without paying account fees.
Funds can be managed and accessed from anywhere—complete with mobile transfers, photo check deposit, and customer service available through the app.
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SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC . Neither SoFi nor its affiliates is a bank.