How to Choose a Bank Account for New College Students

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Brian O'Connell

By Brian O'Connell

June 7, 2019

Incoming college freshman have a long “must do” checklist before they hit campus, and getting a good bank account should be at the top of that list.

A bank account provides a way for new college students to organize and manage their money, while teaching them to be stronger stewards of their (likely) limited finances.

A good bank account goes further than that – it offers the following benefits, too.

  • It organizes your finances. College costs, including books, laundry, clothing, high tech tools like a laptop or tablet, parking lot passes, entertainment and the occasional pizza at night or coffee first thing in the morning, must be budgeted. That means a college freshman must also learn to live within his or her means.
  • Convenience matters, too. A bank checking account debit card provides the means to easily and conveniently pay for goods and services, when cash isn’t handy.
  • You can receive money electronically. When you get a nice chunk of change, like a tax refund or student loan funding, your bank account can receive the payment electronically, for fast and easy access.
  • You get a debit card. When you open a bank checking account, you automatically receive a bank debit card, which you can use to make purchases, withdraw money from an ATM or make deposits.
  • You get access to mobile banking. Your bank account is also easily accessed via your financial institution’s mobile phone app. There you can deposit money, check your balance and pay bills.

How to Choose the Best Bank Account for You

Selecting the optimal bank account for a new college student should most definitely be a family affair.

Mom and dad, both having substantial experience as bank customers, should be working with (and teaching) their child on how to choose a bank. When doing so, both parent and child should focus on the following consumer banking areas:

Dig deep before going with a bank recommended by your college. There’s a good chance your son or daughter’s college has a marketing arrangement with a bank, but that doesn’t necessarily mean you should take the deal. Bank/college partnerships can involve higher fees, such as ATM’s that charge higher fees to withdraw money.

If that’s the case, check out a smaller, more local bank or credit union, which likely have ATM’s closer to or on campus, and offer lower fees.

Focus on freebies. “Free” is a word you want to hear a lot about when canvassing local banks. Free checking, free ATM withdrawals, free debit cards, free checking accounts with no minimum balance should all be on the table when choosing a bank for your college freshman.

If not, keep looking until you find a bank that offers those account-opening perks.

No overdraft protection. Parents will also want to ensure that their child’s bank account links the checking account to a savings account. The savings account should have adequate funds to cover any insufficient funding in the checking account.

That beats overdraft protection, which can come with onerous overdraft fees of up to $36 per overdraft. You’ll also want a bank that comes easily accessible ATM machines that don’t charge usage fees. ATM fees can exceed $4 per transaction at out-of-network financial institutions.

Do your homework. Both parents and incoming undergraduate students should ask family, friends, neighbors, and co-workers familiar with banks in your college’s area and get a realistic take on area financial institutions.

Putting a post out on Facebook, Instagram or Twitter can get you rolling. If, for example, your daughter is going to the University of Massachusetts, ask for bank recommendations in the Amherst, Massachusetts area. Also, scour sites like Yelp, Branchspot, The Yellow Pages, and the local Chamber of Commerce – all of which rate the banks in the area on performance.

JD Power also offers an annual ranking of thousands of U.S. banks. The rakings come out every April and are worth a close look for college-bound families.

It’s not hard to get good information on banks in your college’s vicinity. You just have to know where to look, and how to get good referrals on social media. Both are easy to do.

Check out a bank’s digital capabilities. Your incoming freshman, being a product of the information age and likely an avid digital consumer, will be using his or her mobile phone, tablet and computer to conduct banking transactions on a regular basis.

With that reality in mind, you’ll want to kick some digital tires and see how local banks perform for their online customers.

Certainly, online-only banks like Ally, Chime and Simple are worth consideration if your college freshman is completely comfortable going branch-free. By and large, mobile-only banks are still in their infancy and lack the comprehensive services that larger, more traditional banks offer.

That said, mobile banks are largely fee-free, offer up-to-date analysis on key consumer banking issues like spending, savings, estimated spending, up-coming bill payments, and other common personal financial tasks that a young banking consumer needs to address.

Brick and mortar banks, like Bank of America, Discover, Chase and Capital One are among the many larger banks that offer solid online capabilities. For example, all offer the ability for parents to send money electronically to their cash-starved student, and have the funds hit the account the same day.

S&P Global Market Intelligence does a good job of ranking U.S. banks for their mobile services, especially on a financial institution’s mobile banking performance and usage options.

College student eligibility rules apply. Yes, your household’s incoming freshman is just getting started and has four years to go before graduation, and may even move onto graduate school.

Even so, know going in that many banks have eligibility limits on low-cost student banking accounts, with cutoff provisions written into contracts that may cut off eligibility by either age or graduation date. When a bank account changes over eligibility issues, it usually means fees are going up, especially on issues like minimum balances and checking account usage.

This won’t be a problem during junior’s freshman year, but it is worth keeping an eye on over the course of your son or daughter’s four-year run at college, or if he or she transfers to a different school during their college years.

You may also want to consider whether the bank has a national presence, to eliminate the need to change banks after the student graduates.



The Takeaway on Finding a Good Bank for Your College Student

To find the best bank for your college student, it’s best to conduct a thought exercise and put yourself into the shoes of your college-bound child. Ask yourself the question, “what banking services does my student need most?”

Likely, that will mean convenient ATM access, mobile banking options, electronic funds transfer, and other services amenable to today’s younger banking consumer.

By thinking like a teenager and applying the lifelong skills and experience you’ve already accumulated in your adult life, you can better select the best bank for your college freshman.

In the process, you’re checking one important item off your family’s college-bound checklist and likely won’t have to worry about over the next four years – right up to graduation day.

A good place to start:

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