Knowing how to manage your finances is an extremely important life skill. Staying on top of every aspect of your credit, savings and spending is imperative if you want to live a financially stable life. And while taking control of your personal finance is necessary at any age, it’s especially crucial for students to sharpen the essential financial management skills that will come in handy during their time in college and later in life.
Naturally, a major part of managing finances is picking a bank that suits your needs the best. As a student, you should note that many banks offer a wide range of banking features and special types of accounts designed for you. In this article, we’ll briefly go over what banks can offer students and discuss the top banking options you should consider in 2021.
Understanding Bank Account Types
Before you start exploring the various banking options available to you, it’s important to understand the different bank account types. Bank accounts are split into two primary types: checking and savings. The sections below explain what each one entails.
Student Checking Accounts
This type of account offers credit card and check-writing services and is aimed at students who are looking to open their first account. Generally speaking, individuals will have to provide proof of student status before they can open a new account.
These accounts come with a number of features tailored to the needs of students. They usually charge fewer fees than regular checking accounts and offer credit cards at significantly lower interest rates.
These are deposit accounts offered by most banks and credit unions. Opening a savings account enables you to deposit money and maintain a balance while earning interest. Some common features of these accounts include limited withdrawals, the lack of check and debit card services, the inability to overdraw and fewer transfer options.
There are many reasons savings accounts constitute a great baking option for students. Besides helping you anticipate and prepare for emergencies, opening a savings account this early in your life will go a long way toward improving your short- and long-term financial management skills.
What Students Should Look for in a Bank Account
Bank accounts specifically intended for students are characterized by several unique features that set them apart from regular accounts. Here are the main ones you should look for when opening a bank account:
- Lower fees: Most banks charge low fees on these accounts. Students aren’t required to pay monthly service fees, and transferring money between accounts is generally free of charge.
- No balance minimums: In banking, account holders are traditionally required to maintain a minimum dollar amount in their account to receive certain service benefits and keep their account open. With student bank accounts, these restrictions are waived.
- Overdraft allowance: The majority of student bank accounts come with overdraft allowance. This is essentially a cost-free loan that enables students to exceed their balance by an agreed-upon amount without having to pay extra fees or interest.
- ATM convenience: This is another important feature that you should take into account when exploring student banking options. The bank you opt for should be easy to find with thousands of ATMs spread across different locations. Ideally, your bank should also provide fee-free ATM services and ATM fee reimbursement.
- Online banking: These days, online banking has become the primary way to conduct monetary transactions for a large segment of the population. Conducting banking activities online is especially convenient for students who lack the time to head to a physical location every time a need arises. To that end, the bank you choose should offer comprehensive online banking solutions. This includes everything from transferring money and making direct deposits to paying bills.
Besides looking for the features discussed above, you should also adhere to certain best practices when choosing a bank for your student account. Make sure to shop around to get a good idea of what the market has to offer and inquire about fee structures before committing to a particular financial institution.
6 Best Banks for Students in 2021
When it comes to student bank accounts, it’s safe to say there are many options to choose from. In fact, there are plenty of banks that offer services designed to accommodate the needs of different students. The list below highlights some of the best student banking options in 2021.
Chase Bank is one of the largest financial institutions in the country. Their products and services cover the full scope of retail banking, and their nationwide coverage consists of thousands of branches and an extensive ATM network across the U.S.
The checking account that Chase Bank offers should particularly be of interest to students. In fact, it boasts all the features you need from a student bank account. There are no monthly fees for college students, there is overdraft protection to help you avoid overdraft fees for all your debit card transactions, and the online banking app linked to the account is easy to use and provides several convenient services, such as mobile deposits and online bill pay.
The Chase College Checking account comes with a debit card that can be used at more than 16,000 ATMs and over 4,700 Chase Bank branches. Withdrawing funds at a Chase Bank location is free of charge, whereas withdrawals from a non-Chase ATM are subject to a $2.50 ATM fee. Keep in mind that the ATM operator might also charge you a convenience fee.
What this bank is especially good for: The Chase College Checking account is the ideal option for students between the ages of 17 and 24. It comes with no monthly fee and no minimum balance requirements. Students also have access to instant transfer through Zelle and can set up account alerts to get notifications for every important account activity. Furthermore, the bank is currently offering students a $100 bonus when opening a Chase College Checking account with qualifying activities.
Bank of America
Bank of America is one of the most well-known names in the banking industry. The bank has a wide range of account options, and its physical branches can be found in thousands of locations all over the country.
The main retail banking services that Bank of America offers include two checking account options and a savings account. These accounts are linked to a mobile app that allows users to pay bills, transfer money, deposit checks, and keep track of account activity and balance at all times.
The two checking account options that are available to students are Advantage SafeBalance and Advantage Plus. Both accounts come with waived fees to qualifying high school and college students. The main difference between the two accounts is that Advantage Plus offers full overdraft protection and check-writing privileges, whereas Advantage SafeBalance lacks those features.
For the savings account, students who keep a minimum daily balance of $500 can benefit from the waiving of the $8 per month maintenance fee. Students under 24 who are currently enrolled in school are also eligible for a waiver.
What this bank is especially good for: While the annual percentage yield (APY) ranges around 0.01%, the savings account requires a low initial deposit of just $100 and gives students the ability to round up all debit card purchases and deposit the difference through Bank of America’s Keep the Change program. It is also worth noting that SafeBalance account holders are not charged overdraft fees when a transaction exceeds their available balance.
TD Bank is the U.S.-based commercial banking division of the Canadian TD Bank Group. The bank’s presence is concentrated on the East Coast and its locations are open throughout the week. The bank offers instant transfer through Zelle and has different checking and savings account options for students between the ages of 17 and 23.
Customers looking to open an account with TD Bank have two options to choose from: TD Convenience Checking and TD Simple Savings. The checking account has no minimum balance requirement, no monthly maintenance fees and offers many perks, such as overdraft protection and contactless debit cards.
The savings account requires no minimum deposit, which is convenient if you are a college student with limited funds. Moreover, the monthly fee is waived for students and seniors.
What this bank is especially good for: The biggest selling point of TD Bank is, without a doubt, its stellar customer service. Customers have 24/7 access to a service representative who can help them solve issues or answer queries about a particular product. This is valuable for students who are opening their first bank account and are not entirely familiar with the services offered to them.
While the coverage of PNC Bank is not as wide as that of Chase Bank or Bank of America, the bank still boasts an impressive 2,600 branches and 9,000 ATMs across a dozen states. PNC’s main product for students is the Virtual Wallet Student, a three-in-one solution that consists of a primary checking account (Spend), a short-term savings account (Reserve) and a long-term savings account (Growth). There is no monthly service charge for the first six years from the date of account opening.
Virtual Wallet Student users benefit from a unique overdraft protection system that utilizes the Reserve and Growth accounts as overdraft coverage for the Spend account. In other words, every time you overspend from your primary checking account, the transaction is covered by your savings accounts.
Another noteworthy feature of PCN is the comprehensive digital banking services it provides to students. The mobile banking tools at your disposal allow you to instantaneously transfer money through Zelle, make mobile check deposits, receive alerts and make contactless payments.
What this bank is especially good for: If there is one thing that sets PNC Bank apart from its direct competitors, it’s the various practical features that come with the Virtual Wallet Student. The account is equipped with a Low Cash Mode that helps you avoid overdraft fees and stay on top of your finances at all times. Included in the Low Cash Mode is the:
- Payment Control function that allows you to choose whether to pay or return payments made from your account
- Extra Time feature that lets you know how long you can keep a negative balance before you’re charged overdraft fees
- Intelligent Alerts feature that notifies you every time your account balance drops below your threshold.
U.S. Bank is an arm of U.S. Bancorp, the fifth-largest commercial bank in the U.S. The products that the bank provides include checking accounts, savings accounts, CDs, loans and money market accounts. The Visa debit card issued to customers can be used to withdraw funds for free in over 4,000 U.S. Bank ATMs across the U.S.
Like most retail banks, U.S. Bank offers certain flexible banking solutions that are ideal for students of all levels. For instance, students can open a checking account with no monthly maintenance fee and free overdraft protection. They also get access to a campus banking program that enables them to manage their money in an efficient way while in college. Students can also open a savings account that comes with a minimum opening deposit of just $25.
What this bank is especially good for: The fee structure of the bank is one of the key factors that make it an option worth considering. The checking account comes with no maintenance fees for students and the overdraft protection is completely free of charge.
Founded in 2009, Ally Bank is a fully online bank that doesn’t have any physical locations. Accounts can be created through a simple process that takes less than five minutes and requires just a driver’s license for identification purposes.
One of the perks of not operating any physical branches is that the bank can offer competitive rates. Due to the low overhead, Ally Bank can provide full-service banking to customers without requiring a minimum balance or charging maintenance fees.
Their banking products range from checking and savings accounts to loans and commission-free trading. The checking account has no minimum opening deposit or monthly maintenance fees and offers several advanced functions, such as the ability to deposit checks from your mobile devices and transfer money instantly through Zelle.
The online savings account is especially attractive to students. In fact, the account pays an annual percentage yield of 0.50% on all savings balances, which is substantially higher than the national bank average. Just like brick-and-mortar banks, Ally Bank deposits are protected by the FDIC up to $250,000.
What this bank is especially good for: As a bank that operates solely online, Ally Bank can guarantee an ideal user experience for students. Depending on where your college is located, banking in person might not always be convenient. Online banking saves you time and effort by providing you the luxury of managing your finances at a distance. Still, Ally does provide access to ATM services through the Allpoint network and reimburses its customers for up to $10 per statement cycle for fees charged when using other ATMs.
Let CollegeFinance.com Help You With Financial Planning
Financial planning is one of the most important skills a person can learn, and there is no better time to start than when you are in college. CollegeFinance.com is one of the top resources for students and their families looking to learn the basics of financial management and get an in-depth overview of the various financial topics relevant to them, such as student loans, saving for college and scholarships.