Choosing a Bank

Choosing the right bank is an important decision - the right choice could result in low or no-cost banking, and the wrong choice could cost you hundreds of dollars per year.


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What makes a good bank for students?

  • Convenience. A bank located close to your home, school or work will potentially save money on ATM fees.
  • Low or no fees. If a bank charges $15 or more per month for a checking account, that's at least $180 per year!

  • Online banking options. Besides helping you keep on top of your bank balance and spending habits, some banks offer downloadable banking records that you could import into Quicken or even a simple spreadsheet to make budgeting easier.

Most banks offer similar services. When choosing a bank and a student checking account, your list of considerations should include the following:

  • Think about the interest. It's true that interest is free money, but with some accounts paying such low interest rates these days, the amount of money you would earn is negligible.

  • Examine service charges. What does the bank charge if you bounce a check? Does it charge you for speaking with a teller? Does it charge you for using its ATM machine? Can you get a bank fee waived?

  • Debit cards. A debit card has many of the conveniences of a credit card, with some important differences. You can use it like a credit card in stores and restaurants, but the money comes directly out of your bank account, so you don't receive a bill at the end of the month, and you are never charged interest.

Ideally, if you lose track of your account balance, a debit charge will simply be declined, saving you the fees you would be charged if you bounced a check.

There are much better ways to avoid both declined charges and excessive fees. The best way is to actively manage your account, so that you are always aware of your balance. Another option is to have your checking account linked to your savings account, which results in a much smaller per transaction fee.

When looking for a bank, keep in mind that it could be a very long-term relationship, so shop around. And if you find that you are being charged excessive fees, simply asking a person at your bank to check to see if there's a better bank account option for you could also save you hundreds of dollars (or more) over the time you are in school.

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