College Edition: 10 things to look for in a bank account
As we continue the College Edition Series here on the MoneyTalk Blog, today we’re covering key things to look for when you’re looking to open a bank account. You’re gonna need a bank account that fits the college life and offers special deals to students.
10 Things to Look for in a Bank Account
(from 10 Things You Gotta Know about Your First Year of College, Spark Publishing)
1. Low costs
Look for a bank account with little to no transaction fees. Most banks charge for cashing checks, ATM withdrawals, deposits, etc. A few bucks a month adds up over time.
2. No transaction limits
You’ll want the flexibility of having a number of free transactions per month. Figure out how many checks you’ll be writing over the course of a month as well as an estimate of ATM usage. Add 4 transactions (1 extra a week) and you’ll have a good idea of how many transactions you’ll likely make.
3. Low or no minimum balance
Most bank accounts offer great deals for accounts that have a certain balance each month. For college students, it’s generally to high to maintain. Look for a bank account that has a low or no minimum balance with no fees attached to it.
4. Overdraft protection
Overdrafts are common in college because, let’s face it, we weren’t born budgeteers. Typically what happens is you spend a bit more than what’s left in the account and the bank, with overdraft protection, will cover the difference. If you don’t have it, you’ll end up bouncing checks. Banks offer overdraft protection for a low annual fee, but some offer it for free with a set minimum balance.
5. Accessible ATMs
Choose a bank that has ATMs close to campus. Fees from withdrawals or transactions at ATMs not affiliated with your bank add up quickly.
6. Direct deposit
Look for a bank account that offers direct deposit. It makes it more convenient for parents or employers to deposit money straight into your account. No checks makes it less of a hassle for you and them.
7. Debit card
Debit cards are a convenient tool to use for purchases or ATM withdrawals. With most cards, you get the same protection as a credit card but don’t have to worry about payments or interest rates because it comes straight out of your account.
8. Online banking
Life will be much easier if you can manage your bank account online. Most also offer online bill pay for free.
There are some checking accounts that are interest-bearing like a savings account. But, they’re hard to find and shouldn’t be a determining factor.
Gifts are mostly icing on the cake. Don’t choose a bank simply on this basis. But, if you can get the account that fits your needs AND get a free cell phone or money voucher at the same time, go for it.
Next time we’ll take a look at how to balance your checkbook. It helps you keep better tabs on your money and can help you find bank errors, which do happen.