What to do when there isn’t a branch at both college and home.
By Anne Vaccaro Brady
The perfect scenario is that your freshman sets up a checking account at a bank at home, which also has a branch on or near her college campus. While my kids had that opportunity, many college students aren’t as lucky. Read on to find out what alternatives might be available for yours.
College credit unions Some universities have their own credit union, usually set up for employees, but also available to students. Because they are not-for-profit businesses owned by their members, they tend to offer some advantages, including no fee, no minimum balance checking accounts. Though there won’t be a branch at home, the benefits might make a credit union the right choice for you teen. To learn more, read this article from NerdWallet about the perks of college credit unions.
Online banks With the arrival of online and mobile banking, plus the accessibility of ATMs, there’s little need to visit a physical building to handle basic financial services like depositing a check, withdrawing money or verifying a balance. Online banks have emerged as a good solution for students because they allow checks to be deposited via a mobile app, refund ATM fees and usually provide low minimum balance options.
Prepaid credit or debit cards Offered by the major credit card companies including American Express, MasterCard and Visa, these cards are what they say: a specific amount of money is loaded onto the card and that is all that’s available to the cardholder. More money can be added by reloading online or at certain chain stores, like CVS. The cards carry transaction fees, which can be monthly or per transaction. Despite the fees, the cards are a good option for a teen who has difficulty staying within a budget.
- Your student can keep his account at his hometown bank and use his debit card to withdraw money at ATMs (though there will be transaction fees) or pay for purchases. If your student will be working on or off-campus, he can try to have his paychecks direct-deposited. If his hometown bank has a mobile app, he can use his phone to deposit checks, too.
- At orientation or on move-in day, visit a bank near the college that offers student or college accounts and also has at least one ATM on campus. The advantages of low-minimum balances and no ATM fees might make this the smartest choice. This can be an account your child only uses while he’s at school.
- If you feel comfortable, give your freshman a credit card in his name on your account. We did this for our kids to buy books and for emergencies. Since we saw the bills every month, we were able to track what they spent and make sure they paid us back.
- The paper bank statements for our kids’ bank accounts came home since this was their permanent address. We reviewed the statements each month to see how they were handling their money.
- Many banks will allow you to set up email or text alerts when your account balance drops below a specific threshold.
- A way to avoid ATM fees from out-of-network banks is to skip the ATM and simply request cash back when using your debit card to buy something at a store or kiosk.
- Skip overdraft protection. There are still fees involved and it gives kids a false sense of security.
Keep it safe Remind your student when banking online to avoid working on a public computer, turn on privacy protections on her own computer, log out of her account and quit out of her browser after she’s finished. She should use these same precautions when banking via her phone.
To learn more about Higher One and other student-aid debit cards, check out my post here.
Please share your other banking solutions for college students in the comments sections below.