How Student Checking Accounts Differ From Regular Accounts
There is little to distinguish a student checking account from a regular checking account on the surface. The checks look the same and the accounts work pretty much the same. However, beneath the surface you may see some differences, especially in how fees are charged. With regular checking accounts, monthly maintenance fees can be waived if you maintain a minimum balance. Sometimes that minimum balance requirement can be as high as $2,500 or $5,000. Most students don’t maintain that high of a balance. Student checking accounts tend to have either very low minimum balance requirements, or the requirement is waived altogether.
Also, some banks may be more lenient with student customers who bounce a check, sometimes waiving the first overdraft fee. Other than that, students are expected to manage their checking account the same way as anyone else.
Common Fees to Know About
When searching around for a checking account, you are bound to come across many promoting completely free checking. On the surface that sounds very tempting. However, it is important to know the type of fees banks charge on the surface and the ones they charge under the surface.
Monthly Maintenance Fee : The most common surface fee is the monthly maintenance fee. Many banks charge a monthly fee in the range of $10 to $25 for checking unless a minimum monthly balance is maintained. If you maintain the minimum balance you don’t pay a fee. So, this is the first thing you look for when shopping for an account. Many banks, especially online banks waive the monthly fee for students if you have a minimum number of transactions, set up direct deposit or enroll in electronic statements.
ATM Fees: The other surface fee to worry about is the ATM fee. With most banks, you are charged a fee when you use an ATM outside of their network. ATM fees typically range from $2 to $4, which can add up quickly over the course of a month. That’s why it’s important to open an account with lots of ATMs in your college town. Online banks may offer to reimburse you for out-of-network ATM fees, or they may belong to a large, shared network that will have ATM locations in your area.
Overdraft Fees : There is one under the surface fee that can really hurt you if you have difficulty managing your money, and that is a bank overdraft fee. Overdraft fees are charged when there is not enough money in your account to cover a check. The average overdraft fee is around $31. Of course, if you don’t write checks, it is not likely to happen, except it can also happen when using a debit card. The key is to never let your checking account balance get close to zero. Always maintain a cushion of at least $100.
You could avoid overdraft https://worldpaydayloans.com/payday-loans-ut/logan/ fees by opting out of overdraft coverage on your account. That means the bank won’t cover your deficiency and it won’t charge you an overdraft fee. However, you may still be charged a fee for insufficient funds or a returned item.
How to Avoid ATM Fees
It’s not at all unusual to find yourself at a venue or in a restaurant that only takes cash. If you’re like many people who don’t like to carry a lot of cash around, you may be limited to finding an ATM to get some. If you canвЂt find one of your bank’s ATMs, you’re looking at a $2 to $4 hit on your account to get your cash. Most people absolutely hate forking over ATM fees, but there are a few things you could do to avoid them.