One of the merits of looking into banking is that you really start seeing the connections between the difference areas of your financial life. The need for a secure place to store your money is very important. You really need to make sure that you have a way to store your money and access it when the time is right. You don’t want to find that you really can’t make any headway into your finances. You really have a lot more power than you think!
So let’s talk about a subject that’s getting a lot of attention — free student checking accounts. Now if you’re a student that has a lot of bills, it can feel like a welcome relief to finally get somebody that isn’t trying to hit you with fee after fee. College in the United States can feel like an entire marching band of fees waiting to crush you before you’ve ever gotten a chance to enjoy college.
Many banks do offer student checking accounts. There are often low minimum deposit requirements and no monthly fees. However, what you might not realize is that there are a lot of conditions that need to be met.
First and foremost, you need to make sure that you’re looking at the fine print. You don’t want to just go off the shiny advertisements — those are designed to get you in the door. They’re hoping that as you get out of college and get a better paying job, you’re going to be interested in some other banking products. It’s not like the concept is new — it’s a core marketing principle that has proven profitable. By developing a nice relationship with you early on in your life, they’re hoping that you’ll remember that kindness and take care of the bank later when the time is right.
Many banks require that you enroll in paperless statements — this cuts down on their costs of handling your account. And you will need to also handle deposits and withdrawals online in many cases. Using the actual bank can be extra. You need to make sure that you can use all of the available money in your account. You might be charged a fee if you have to end up under the limit that they assign to accounts.
You also want to make sure that there’s going to be free ATMs to use. A free student checking account doesn’t really matter if you’re never going to be able to withdraw money from an ATM without being charged a fee. There should be member ATMs that will let you go about this. If you’ve never seen them around town, make sure that you actually ask — it’s the best way to save yourself some painful heartbreak later down the road.
You also need to decide whether or not you want to sign up for overdraft protection. Our thoughts on overdraft protection can be summed up quickly — we think it’s a bad idea. Sure, it lets you avoid the embarrassment of something not going through. However, you really need to make sure that you control your finances better. If you honestly cannot afford something, having a $39 fee charged on top of your purchase that you can’t afford isn’t a good idea at all.
Keep in mind that there are alternatives to student checking accounts, like online banks and even credit unions. Your local credit union really wants to earn your business too, and they do it through offering things that the big banks won’t offer with a small local flourish that you’ll definitely grow to appreciate.
Is it the right time to start thinking about your money in a different way? Absolutely! Even though you might only be a college student now, the decisions that you make today definitely impact your future in a big way. Good luck out there!