Choosing the Best Bank for Students – Our Elemental Handbook
April 28th, 2020 - by Jen
Choosing the right student bank account can be a huge decision. This is one of the first serious bank accounts you will open and will prepare you for a life of making solid financial decisions.
Many credit unions and banks offer great deals for students and also provide useful advice that will help prepare you for your financial journey. Learning the basics about money management and budgeting now can set you on the right path for life.
To help you choose the best bank account for your student needs, we will explain some of the things you should take into consideration. From there we will take a look at some of the student accounts you can choose from.
This useful handbook will help you understand everything you need to know about student banking.
Choosing a Bank or Credit Union
There are many financial institutions you can choose from, so the best thing you can do is look into what each of the banks and credit unions in your area offers to students.
Many bank accounts will have a monthly fee or service charge attached to them. Luckily, if you are a student, plenty of financial institutions will waive these fees. Make sure you choose one that offers students special treatment OR offers great services with ow or no fees to EVERYONE.
The other thing you should take into consideration is which cash machines (ATMs) are available on your campus. Most banks will charge you if you use an ATM that belongs to another bank. Credit unions are in a special network that often doesn't charge a fee if you use one in that network. Since you will be spending plenty of time on campus, it is a good idea that you pay attention to which network those ATMs are in.
Many schools have an affiliation with a particular bank or credit union and will only have their ATMs available on campus. Whenever you are choosing a new bank account, make sure they have a branch and ATMs in your area. Nothing is more frustrating than getting stung with withdrawal fees because you have to rely on other banks to access your money.
If you are going to school in your home state, it can be worth looking into what your local financial institutions are willing to offer you. Sometimes smaller branches will offer better student accounts so they can compete with the bigger banks.
Choosing a Bank Account
When it comes to choosing the right bank account for a student, you basically have two options – a checking account and/or a savings account.
A checking account is meant to be your daily spending and depositing account. With most student checking accounts, you are able to make as many withdrawals and deposits as you would like. Usually when you open a student checking account, you will want to get a checkbook and a debit card.
Checks are a little old fashioned, but they can still be useful if you need to submit checks to a landlord. Your debit card will be how you withdraw money from ATMs and make purchases directly from your checking account.
You will almost certainly want to open a checking account. If you get a summer job or work part-time during the school year, you will be able to set it up so your paychecks are deposited directly into your checking account. Many adult checking accounts will subtract a monthly fee from your account; however, student accounts are typically free to use. Make sure to ask if there are any fees associated with your checking account before opening it.
As you may have guessed, savings accounts are designed to be a safe place to store your savings. You can slowly contribute to this account and let the total grow. Think of a savings account as the adult version of a piggy bank; ideally, you want to leave this money alone.
If you have a goal in mind, like taking a trip for spring break, or buying a car, you can keep contributing to this account while you are in school. Even a few dollars a week will add up.
Best of all, most student savings accounts will pay you a small amount of interest. This means that the credit union or bank will pay you a small percentage of your total savings if you keep your money in your savings account.
Not every credit union or bank will offer a savings account specifically for students, but some will.
How Do You Open a Student Bank Account?
Some bank accounts can be opened online or over the phone; however, when it comes to opening a student bank account, you will most likely have to go in person.
This is because you will most likely have to show proof that you are a student. This could mean showing a letter of acceptance from your school, or a student card.
In terms of other information you will need to provide, most credit unions and banks really just want to confirm you are who you say you are. This means showing the following:
· Providing your full name, home address, cell phone number, and the address of your school.
· A form of identification, such as your student ID card, your birth certificate, a driver’s license, or any other form of state identification.
Another thing to keep in mind is that most credit unions and banks will need you to have some amount of money to deposit into your new student account. While this amount will vary greatly, generally credit unions offer much lower account minimums than banks, which can be very attractive to students. Sometimes it's as low as $5 or $25 at credit unoins.
Again, not every bank account is the same, but be prepared to at least show proof that you are a student and some sort of identification.
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