For college students, money management can be daunting. Freshmen may just be looking to open their first bank accounts. Seniors, casting an eye toward what comes next, may focus on trying to save money. For them, and others in between, here’s some guidance to navigate the ins and outs of banking while still on campus.
Choosing a bank
In an ideal world, there’s a bank or credit union with branches close both to home and campus. Since this isn’t always the case, there are a few things to consider if you’re torn between sticking with your hometown bank and switching to one near school.
If you open an account at a bank or credit union with offices closer to school, you’ll have access to in-person services and potentially on-campus ATMs with no-fee withdrawals. Having a branch to visit when you need help can spare you the headache of dealing with remote customer service representatives when issues arise. You may also receive sign-up bonuses and perks that you wouldn’t get otherwise. It’s also less critical to share a bank with your parents these days, as online and mobile apps make funds transfers easier.
Banks versus credit unions
Students choosing a new financial institution should look into how credit unions may beat big banks. In a study across more than 80 universities, NerdWallet found that 88% of the time, credit unions were a better choice than big banks when considering fees, accessibility and perks.
The survey found that more university credit unions had branches on campus and offered more surcharge-free ATMs nearby than banks. In addition, credit unions charged less for out-of-network ATM transactions.
Checking choices
Most college students with checking accounts chose banks and credit unions that offer student accounts specifically aimed at helping young adults establish good money-managing practices. You need to consider a series of factors when determining what kind of checking you’ll need, including:
- Account type: If the bank or credit union you’re interested in doesn’t offer student checking, find out what kind of basic, affordable accounts are available.
- Accessibility: What’s the location of the bank or credit union that caught your eye? If you want in-person service, then you need a branch that’s close to school. Or, if you want easy access to your money without paying fees or surcharges, then a bank with an ATM on campus may be just the ticket.
- Minimums and fees: Both credit unions and banks often offer free checking to students. But even the ones that charge a monthly fee typically provide easy ways to have it waived, such as maintaining a relatively low minimum balance or signing up for online statements. You’ll want to review the list of fees to uncover hidden charges and look at overdraft and bounced-check costs before choosing an account.
- Overdraft protection: If you’re planning to open an account for savings as well as one for checking, you may opt for a link between them to handle overdrafts just in case you swipe your card one too many times. Be careful though — while overdraft protection means that your card or check won’t be rejected, it can cost nearly $30 per transaction.
- Mobile services: Most banks and credit unions support mobile apps, so you don’t have to visit a brick-and-mortar location or an ATM, other than to pick up cash. These services can also help with paying bills, keeping track of deposits and pending purchases and monitoring balances to avoid overdrafts.
To compare banking options at your college, use our student checking comparison tool.
Avoiding ATM surcharges
Using an ATM on campus may be convenient, but it’s not always best. When you use an ATM that’s out of your network, your bank or credit union may charge a fee and the ATM operator could impose its own fee, too. Even if your bank waives its fee, you can still be nicked for an average of about $2 per transaction.
When you’re choosing a checking provider, find out which ones have ATMs on or near campus. You also may want to check out what kind of ATM fee reimbursement deals may be offered. If you already have an established account, several apps such as those offered by Allpoint , CO-OP Credit Union and MoneyPass can help locate surcharge-free ATMs in the area.
Savings accounts
No matter what your goal, savings accounts can help you reach it. Many banks and credit unions offer student-oriented or other basic savings accounts with low minimum balances that can connect with checking accounts to help students manage transfers. For those just starting out, a basic savings account with an annual percentage yield of 0.01% on all balances is typical. You may want to find one that lets you create multiple buckets tied to specific goals, be it spring break, a big-ticket purchase or a post-graduation nest egg.
Finding low-cost banking services while in school doesn’t need to be difficult, as long as you do some homework. Trust us: Getting it right will be worth the trouble.
College students image via Shutterstock.
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