It's graduation season, which means that a new crop of high school seniors will soon be preparing to leave their homes for the first time when they head to college in the fall. For many students, this will also be the first foray into managing their own finances, and it starts with choosing a banking account. Take a look at some tips that may help you, or a student that you know, choose a banking account that will meet their needs.
Choose Student Accounts With Caution
A number of banks and credit unions offer student accounts specially designed to meet the needs of young banking customers. This can be a great thing. However, read the fine print carefully and think ahead. Many student accounts come with age limits – when you age out of the student account, your account is automatically converted to a standard account with a different fee schedule than the student account.
Do some comparison shopping to find out if the standard account you'll eventually convert to is fair before locking yourself into a student account with that bank. Otherwise, you may find yourself having to switch banks in a few years.
Look For Free Stuff
One thing that most college students have in common is limited amounts of money. Therefore, any extra fees and charges can be particularly onerous for young banking customers. Luckily, there's no reason why a student with no credit history to speak of should have to settle for a high-fee bank account when there are plenty of banks eager to offer low or no-fee banking products.
Look for free debit cards, free check writing, free online banking, and free ATM withdrawals at ATMs located on or near the college campus. You should also look for accounts with no monthly maintenance fees and either no minimum balance requirement or a low minimum balance requirement. Don't be afraid to split up checking and savings accounts – if you find a great free checking account at one bank, but you can get a higher interest rate savings account at a different bank, it's fine to set up accounts at both banks.
Just Say No to Overdraft Protection
Overdraft protection sounds like a prudent and responsible thing to have, and it's easy to be fooled into opting in because it sounds like the reasonable thing to do. But the truth is, overdraft protection is expensive. The median overdraft fee is about $34, not counting any additional fees the bank might assess if your account remains in the negative.
You're much better off sticking closely to a budget. Make sure that you're writing down each of your transactions in a bank book, even when you use a debit or ATM card. Even if you do occasionally suffer through the embarrassment of having a transaction declined, it's worth it to avoid racking up the overdraft protection fees.
The financial decisions that you make now lay the groundwork for your financial success in the future. Choose the right bank account and learn to manage your funds wisely now, and it will be easy to continue down a fiscally responsible path after you graduate. Contact a local bank, like Cheviot Savings Bank or a similar branch, for more tips and information.Share
17 May 2016
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