It’s August again, which means very shortly, millions of prospective college students are about to become actual college students. For a large swath of the incoming Class of 2019, this transition means they’ll be on their own for the first time, and doing all the things people on their own do. Renting their own place, buying groceries, paying bills… and getting a bank account.
That’s where you come in, parents. You didn’t think this ended when they turned 18, did you? Though your college kids are ostensibly adults that doesn’t necessarily mean that they’re taking on absolutely every aspect of being an adult. You might still be helping them set up this account, heck you might even be footing the bill.
But there’s a lot more to think about, other than who pays the bills when picking a checking account. Consider this: 47 percent of students go to a college more than 100 miles from home, with 11 percent traveling more than 500 miles to go to school. This certainly affects your banking options, especially if you both want to have access to the account without paying an arm and a leg in ATM fees.
When considering the best checking account for students, the best option is either a student checking account or a regular checking account from a non-traditional bank. We’ll outline the differences below to help you make the right choice in your search for the best checking account for your college-bound kid.
What are student checking accounts?
Student checking accounts are like regular checking accounts, albeit with less stringent requirements. A checking account with training wheels, so to speak. They don’t carry some of the burdens of traditional checking accounts, like forcing you to carry a minimum balance or pay a monthly fee.
The best student checking accounts can be incredibly advantageous for that time your college student spends in the limbo between childhood and adulthood.
And those advantages don’t just come from your kid’s perspective. A lot about student checking accounts are designed to make it easier on your end as well. Depending on what you’re hoping to accomplish there are several attractive options out there for finding the best student checking.
What are online checking accounts?
Another option for students besides the traditional student checking account is high-interest checking from an online bank. As an online bank does not have the same overhead as a traditional brick-and-mortar bank, they can afford to do things like offer checking without minimum balances.
Whether you want to go with a student checking account or an online account for your kid just requires you ask what exactly you hope to accomplish with the account. Like…
#1. If you don’t want account fees
Despite all their best intentions, college kids tend to spend most of their days relatively poor, with bank balances that float just above zero. In such a case every penny counts, and is being counted by them. That can make checking account fees a major source of consternation.
For instance, even with their cheaper student checking option, Wells Fargo still charges $3 a month unless the student carries a minimum balance of $500 and has it linked to a savings account. Three dollars might not seem like a lot of money to an adult, but that’s enough to buy a 12-pack of Maruchan Ramen and still have 78 cents left over!
This is why most institutions offer student checking with no account requirements. Both the aforementioned Wells Fargo and SunTrust charge account fees unless the student maintains a minimum balance. And if your child is like most college kids, “minimum balance” isn’t going to be in their vocabulary for awhile.
The options that do not require a minimum balance, leaving your prospective college student to float as close to zero as they like include Capital One, Chase, Citibank, Bank of America, TD Bank, and BB&T. A few of these options include the added benefit of being interest-accruing checking accounts, which certainly comes in handy when you’re living noodle package to noodle package.
#2. If you want to have the student checking account as long as possible
All good things eventually come to an end, and student checking is no different. Banks tend to cut it off at one of three points; when the student hits a certain age; after a certain amount of time has passed; or when the student graduates.
Among major student checking accounts, PNC Bank allows students to keep their account the longest. They can maintain a student account there until they turn 24.
Assuming your kid starts college at 18, that gives you the longest amount of time to take advantage of student checking. This beats out most of the bigger banks, which tend to force the transition into a normal account on the 23rd birthday.
While it’s not advertised as a student checking account, Capital 360’s Checking Account has no minimum balance requirement and has no expiration date, thus offering many of the same advantages as student checking with no expiration date. If online banking fits your needs it can be a nice alternative to the big bank’s offerings.
#3. If you want easy ATM access (without fees)
For students who are moving far away for college, regional banks are probably a no-go. You need a bank that allows opportunities to deposit money and your kid to withdraw that money, possibly in an entirely different state, without constantly incurring fees. Unless the regional bank waves ATM fees (which isn’t usual) you’re probably not going to want to go that route unless your kid wants to pay every time they need cash. And chances are, they don’t.
If banking over vast distances is a concern, you can certainly do your best to avoid ATM fees. Past that, you have one of two options to avoid fees: either going with a big banking chain with a national network, or going with an online bank.
Traditional, Student, and Online Bank Checking Compared
|Option||No ATM Fees?||No Minimum Balance Required?||No Expiration Date?||Physical Branches?||Earns Interest?|
The network size of the Big Four can be certainly attractive. However, online banks will often waive ATM fees, making the supposed convenience factor of the Big Four’s network a moot point. Capital 360 and Ally Bank are both good for this, since their accounts essentially function like a student checking account, with no minimum balance requirements.
So what’s the best checking account for students?
When picking a banking option for your kid, whether you go with a traditional bank’s student checking option or an online bank’s student-friendly regular checking, the best checking account for your child depends on what you want to get out of it.
Though traditional student checking has its perks, an online account seems like the way to go. The lack of maintenance fees, coupled with ATM reimbursals make it ideal for banking across vast distances, and allowing the student to carry a lower balance than would be normally required. In short, online banking does what student checking is supposed to accomplish, but without an expiration date (and possibly some interest to boot.)
If you don’t mind dealing with any of the disadvantages of online banks (like lack of physical branches) then they make the most sense. Despite the name student checking account, they’re not necessarily the best option for your student. An online bank like Capital 360, despite not having the “student checking” moniker, is ultimately the best checking account for students.