Opening a checking account was one of the first things I did when I went to college. I’ll admit I was practically clueless about checking and savings accounts back then, but two college degrees and $22,000 of student debt later, that’s no longer the case. Here are my tips for college students looking to open a bank account.
Photo by redspotted
Types of Bank Accounts
The two standard types of bank accounts are checking and savings. A checking account is the most common, because it provides frequent access to your funds on demand via a variety of methods, but it usually does not earn interest. A savings account pays interest but is usually less accessible than a checking account (e.g. no check writing). Banks may also limit the number of monthly transactions you can make with a savings accounts.
Factors to Consider When Choosing a Bank
There are a lot of factors that come into play when choosing a bank. While each individual’s situation will vary, I’m going to cover some of the most common factors.
Location
Find a bank with convenient locations, so you can easily make deposits and handle other banking transactions. If your parents will be making deposits into your account too, then you’ll want to choose a bank with locations near both of you if possible. A national bank is your best bet for this, especially if you’re going to a college in a different state.
Fees and Requirements
Search for a bank with accounts that require no minimum balance, no direct deposit, and no monthly fee. Most college students aren’t exactly rolling in the dough, so it’s not unlikely that your account will teeter on the edge of empty at one point or another. The last thing an already broke college student needs is losing even more money because they’re broke.
The Extras
While I think the first two factors are more important, extra perks are always nice. Many times the extras are what convince people to open an account at a bank. Extras include things such as free checks for life, free bill pay services, ATM fee rebates, sign up bonuses, and higher interest rates (for savings accounts).
The Recommendations
WaMu Free Checking + Online Savings
Based on the criteria I listed above, my top recommendation for a student checking and savings account is Washington Mutual. Throughout my college years, I relied on smaller regional banks, and it was a big hassle. I had multiple bank accounts, because I was constantly moving around — going home for the summer, doing internships, and traveling. I could have saved myself a lot of trouble by opening an account at a national bank, like Washington Mutual. In fact, that’s why I currently use WaMu as my main checking and savings accounts.
Here is how the WaMu measures up the criteria in the previous section:
- Nationwide locations
- No minimum balance or direct deposit requirement
- Free checks for life
- High savings interest rate (if linked to a WaMu checking account)
My favorite part about this setup is that you can instantly transfer money from your online savings account to your checking account, then go to a WaMu branch and access that money immediately. This simply isn’t possible with most online savings accounts, because most of them only exist online. Transferring money to your checking account takes a few days, and in case of an emergency, that’s a few days you don’t have to spare.
ING Direct Electric Orange and Orange Savings
College students are more wired than ever today, so who needs brick and mortar banks anymore? And checkbooks? They’re a thing of the past. Here’s an option for college students who don’t want to wait in line at banks and never want to carry a checkbook. ING Direct’s Electric Orange checking account makes both of these things possible, and as an added bonus, you even earn interest on your checking account.
Here’s how the ING Direct measures up to the criteria above:
- Online only (access cash at ATMs nationwide)
- No minimum balance or direct deposit requirement
- Send paper checks by filling out a form online (they send it for you)
- Send electric checks to transfer the money electronically
- Earn interest with both checking and savings accounts
The biggest disadvantage to the Electric Orange account is depositing money. If making deposits were easier, then this would be my top recommendation. To deposit money, your options are: send it to ING via snail mail (too slow), direct deposit (only for paychecks), or deposit it into another checking account that’s linked to your Electric Orange account (also slow). However, this may not be a huge issue for college students, because, looking back at my college years, I wasn’t depositing money into my accounts very frequently back then.
Additional resources:
