As a newly graduated student, you’re moving on from using Mom and Dad’s bank or simply carrying around cash. The best kind of student checking account is one that will grow with you as you take on your first real job and get better at managing your finances.
Here are the features to look for and what to avoid in the best bank accounts.
1. Choose the right student checking account
Many student checking accounts start out with an age limit, which works fine while you’re in college. Once you graduate, that age limit may disqualify you, leaving you searching for a new student bank account. Most banks that offer a student checking account will also convert it to a standard bank account once you no longer qualify for it.
So should you change banks, or stick with your current one?
Your current bank wants to keep you as a customer, so they will make the transition from a student checking account to a standard one very smooth. However, it’s important to review the features this new account offers, what kinds of fees it comes with it, and any red flags to avoid.
If you find that you’re happy with your current bank and it fits well into the next phase of your life, by all means, continue using them. However, if you find that this bank doesn’t offer you the features you’re looking for, it’s time to make the switch.
2. Watch out for fees
One of the most important things to consider when choosing the right student bank account is the fees you could be charged. As a recent graduate, your budget and cash flow are likely limited. The best bank accounts are flexible and don’t come with unnecessary fees.
Banks tend to charge customers fees they’re unaware of until it’s too late, so review the terms and conditions before agreeing to open a new account. Even if banks advertise “fee-free checking accounts” they may come with conditions, so keep an eye out for these kinds of charges:
- Monthly fees.
Most basic checking accounts will be completely free, but in some cases, you will have a low monthly maintenance fee that’s waived if you adhere to certain terms.
This can include direct deposits equaling a certain amount or carrying a revolving minimum daily balance. Review the bank’s policy and find out what you must do to avoid paying any monthly fees.
- Minimum balances.
If the checking account you choose doesn’t come with a monthly maintenance fee, it may still come with a minimum balance requirement that will charge you fees if you don’t keep at least that amount of money in your account at all times. Try to find an account with no minimum balance fee.
- Transaction limits.
How many times a month can you transfer funds between other accounts, make withdrawals, and deposit money? Verify that you don’t have to pay extra fees for making too many transactions or making transfers between accounts.
- Service fees.
Some other service fees to beware of include returned deposit fees, charges for paper statements, and foreign transaction fees, to name a few. Obtain a list of all the service fees and other limitations that come with your new checking account before signing on the dotted line.
- ATM charges.
Banks will often recoup their money by charging customers a fee to access funds via an ATM. There will likely be certain ATMs you can use free of charge, but make sure you’re accessing money using one of these and not an ATM outside your bank’s network.
Doing so will cause you to pay double the fees — one to the ATM provider and one to your bank.
To avoid these charges, carefully review your bank’s policy and terms so you aren’t hit with unnecessary fees. Learn more about sidestepping bank fees here.
3. Seek out bonuses and perks
During your search for a new student checking account, look for additional bonuses that are included.
Some banks will offer new customers a referral bonus when they open an account, so check with your friends and family to see if they have recommendations you can cash in on. Additional features to check for include free online bill pay, recurring savings deposits, and the ability to automatically pay your bills.
Does this bank offer interest-bearing checking accounts with no or low fees that allow you to earn a small percentage back on your funds? Do they offer certificates of deposits and other investing accounts that you can explore in the future as you start building wealth?
Review all the account options for both checking and savings so you can choose the best student bank accounts for your needs.
4. Get ready to manage your money
When opening a new checking account you’ll need to provide some form of photo ID and your Social Security number. You’ll also need to bring cash or write a check from another bank to put down as the opening deposit for your new account.
While you’re finalizing your new bank account, order a small number of checks, too. While you may not write many paper checks, there will be times it will be come in handy. Many landlords still require rent to be paid with a check or money order, so save yourself the hassle and keep them on hand.
Don’t forget to change any automatic payments you have set up from your old bank and switch them to your new account information. Inform your employer of any updates to your direct deposit form, as well. You don’t want to miss a deposited check or miss paying a bill because the payment wasn’t processed from the old account.
5. Avoid these red flags
Shop around before choosing your next bank account as a new grad.
You want to choose features with little-to-no fees, but there are some other red flags to be aware of, too. For example, overdraft protection is a feature on most checking accounts that comes as a “bonus” since it allows you to swipe your debit card and process a transaction even if you don’t have the funds.
While that sounds great, it can cost you a hefty fee for each transaction and cause your bank account to be overdrawn. Instead of opting in to this feature, learn to budget your money better and limit your spending once you get low. This could save you an average of $25 for each overdraft fee transaction processed.
When reviewing your bank’s contract, also watch out for point redemption fees, human teller fees, and mail-forwarding requests that come with returned mail charges.
As with all financial decisions, it’s important to review all of the fees, limits, and features that your new checking account comes with. But an even more important aspect is to compare your lifestyle to what your bank account offers. Choose a bank account that works with your new career and can help you better manage your finances.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.57% – 6.97%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.50% – 7.24%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|