Useful Tips From Your Local Michigan Bank
As you and the student in your family start planning the transition to college life, managing money ranks high on the 'to-do' list.
We’re here to help with tips for finding a checking account that is easy for students to open and use.
Why a Checking Account is Important for College Students
College costs are complex. You’ll be dealing with tuition, room-and-board, textbooks, and incidental expenses for laundry, transportation, parking, and the occasional pizza or smoothie. While students might not be responsible for all those costs, they’ll still need the convenience of having their own money. A checking account and a debit card gives students easy access to funds.
Students with part-time jobs will use a checking account to deposit paychecks or to set up direct deposit. Those living in off-campus housing need funds to pay for utilities, grocery, and rent. A checking account with online bill pay simplifies these life-management tasks.
Importantly, their first checking account provides students with an opportunity to learn about managing money. Small balances and minimal expenses create a low-risk setting for students to practice setting a budget, monitoring expenses, and reconciling accounts. They’ll establish lifetime financial management best practices with their student checking account.
What to Look for in a Student Checking Account
With all the costs of college, your student’s bank account doesn’t need to be another expense. Look for accounts that provide the following:
- Minimal to No Fees. Partner with a bank that offers free debit cards and free ATM usage within a network so your student can access cash on campus or off-campus without paying ATM fees. Choose a checking account that waives monthly service fees and doesn’t penalize for low account balances. Level One, considered one of the best banks in Michigan, has a checking account designed specifically for students with no monthly service fees if they enroll in eStatements and no minimum balance requirements. Another benefit of our Level One @ School Checking account is free ATM access nationwide (click either link for more information) - we give free access to every ATM in the U.S., including at other banks, and if you’re charged a fee we will automatically refund it.
- Access to Online Banking. Online banking works well with students' on-the-go 24/7 lifestyle. Online banking and mobile apps let students check balances, make payments or deposits, and pay bills quickly and conveniently.
- Account Alerts. Many banks, including Level One, offer automatic account alerts to notify you when various activities occur, such as low balances or unusual transactions. Look for alerts that can be sent via text message or email to help your student monitor their account and avoid costly overdraft fees.
- Limited Restrictions. Look for a student bank account that doesn’t limit the number of debit transactions or transfers and doesn’t require other activities, such as a certain amount of deposits each month.
Be cautious of overdrawing the account, as the overdraft charges could cost up to $35 per transaction. Look in to the overdraft protection options with your bank. One option to consider is linking your student’s checking account with your savings account.
Finally, be sure you understand any eligibility rules for your student’s checking account. Many banks have age restrictions and require proof of school enrollment.
A Word About College Checking Account Promotions…
Your student’s college welcome packet may have included marketing information from banks about checking accounts. A recent report from the Consumer Financial Protection Bureau (CFPB) offers warnings about college campus offers.
- Despite 2015 rules from the Department of Education that require banks to offer students low-cost options, enforcement has been weak.
- Banks charged 1.3 million students more than $27 million in fees in 2017. During the 2017 school year, colleges received $16 million for promoting the banks’ products.
You have better options for student checking accounts, including locally from several banks in Michigan.
If you want your student to transition slowly into money management, think about opening a joint account. You'll be able to quickly deposit funds and monitor the account, offering suggestions and tips for budgeting and handling expenses. But, don’t forget that once you enter a joint account, you are just as responsible for the account as your student. Perhaps reminding your student of this will give them an extra incentive to use their account even more responsibly.
Click here for more information about our student checking account, or contact our team to set up a time to open an account. Our pledge to make banking better extends to every member of your family. We’re here to support your student’s journey to college with an easy-to-use checking account.
“Your education is a dress rehearsal for a life that is yours to lead.” – Nora Ephron