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4 Big Questions to Ask When Choosing a Bank in College

Going to college is a huge commitment—personally and financially. Make sure you're putting your money in the right hands by also finding the right bank.

Whether you’re heading to college straight from high school or returning to post-secondary education in adulthood, one thing is the same for everyone: Going to school means your finances are about to get more complicated. Enrolling in college often entails taking out student loans and moving closer to campus—two major financial burdens for a lot of students. Add to that expenses such as transportation, books, and groceries, and many students find juggling their finances to be an assignment they weren’t prepared for. That’s why it’s important for college students to wisely consider what financial institution they’ll bank with. A great bank or credit union can make all the difference! Trying to decide which bank is right for you in college? Here are four questions you should ask before making your final decision. 

1. Can you easily manage your account online?

Online banking is standard these days, but not all online banking platforms are created equal. Some banks truly excel at delivering a superior online experience, while others have clunky interfaces that can make it frustrating to do your banking. If you’re new to managing your own finances, finding a straightforward banking platform is important. Keeping track of your loans, bills, and income is complicated enough as it is, so simplifying your life with a hassle-free banking platform will only benefit you. 

You’ll also want to make sure your bank has an excellent mobile app. Some banking apps include tools such as automated budgeting and savings features, which can help simplify your banking and get you into a rhythm of saving and spending. If you’re heading from high school straight to college and haven’t been responsible for your own expenses in the past, having some automation in your banking might help ease the transition. Pro tip: When you’re shopping for a bank with a great app, don’t discount credit unions. In fact, nine out of 10 financial institutions with the highest-rated mobile banking apps in 2020 were credit unions. 

Related: Smart Money and Budgeting Tips for High School and College Students

2. Do you want to talk to a banker?

As you’re searching for a bank, you’ll probably notice that a lot of banks offer services exclusively online these days. If you’re a digital native, you might not bat an eye at the thought of your banking being online only. After all, online banking can save you a lot of time and hassle. Since the online banking industry is heating up—65% of banks and 76% of credit unions say fintech is an important part of their strategy in 2020—the competition for your business when it comes to online banking is fierce, and this might enable you to find better deals online. Sometimes it's even possible to get lower interest rates or other lesser fees at online banks. 

But what’s the cost of that online convenience? If you have questions about your finances and need to sit with a person who can walk you through your options but your bank doesn’t have a brick-and-mortar location, you’re out of luck. While online banks strive to offer optimal customer service, when it comes to your finances, you might prefer to do the work in person instead of sitting on hold or trying to ask nuanced questions over a web chat. Also keep in mind that some online banks don’t have an ATM network that allows you to make free withdrawals. Before you opt for an online-only bank, be sure to ask about the cost of using ATMs and how many ATMs are in the bank's network.

3. Are there any sign-up perks?

Some banks offer students perks to entice them to sign up, such as matched savings accounts or cash bonuses. For example, Chase offers a $300 cash bonus for opening an account that doesn’t require a minimum balance. These sign-up perks can bring an extra boost to your budget. One savvy financial strategy would be to use any bonus to jump-start an emergency savings fund—because unexpected events happen. The next time your car breaks down or you drop your phone, having $300 available to use immediately could not only reduce your stress but also prevent you from having to turn to a credit card. About 40% of Americans don't have emergency savings funds built up and say they would need to borrow money or use a credit card to cover an unexpected expense of even just $400. Staying away from high-interest debt is ideal, and having an emergency savings fund on day one of college can help you start your financial journey on the right foot. 

Just keep in mind that banks are required to report any such payouts to the IRS, which means you’ll receive a 1099-INT form, and you'll have to file the bonus as income for the tax year in which you received it. This is just something to be mindful of, but be sure to do your research and check with your student aid advisor if you’re concerned about this impacting your eligibility for financial aid.

4. Are you paying fees?

While a 2018 study on bank fees found that 66% of Americans reported having been charged with a fee in the previous five years, many banks offer no-fee or low-fee accounts specifically for students. Since banks are often willing to waive their monthly account maintenance fee for students, if you’re opting for a bank that does charge a monthly fee to students, make sure there are a lot of pros that outweigh that con for you. Here are some additional fees to ask about, aside from the monthly fee:

  • Transaction fees: How many free transactions do you get per month? 
  • ATM fees: How easy is it to access cash when you need it? Will you be charged for withdrawing cash at an ATM?
  • Overdraft fees: If you’re on a tight budget, turning over into a negative balance could trigger overdraft fees, which can really add up. 
  • Paper statement fee: Your bank may charge you to send a paper statement to your house. Ask upfront about this fee, and consider going paperless to cut down on costs. 

These are just a few of the many fees banks charge, and hopefully, they’re fees you can steer clear of as a student with a limited budget. Don’t pay more than you have to for banking. While your parents might be used to paying a monthly fee for their bank accounts, don’t assume that you’ll have to or that the bank that tries to make you pay these fees is your only option.  

Related: How to Figure Out Your College Costs

Banking is kind of like a puzzle that requires you to put all the pieces in the right place. One bank may check a lot of boxes for you but have some cons you can’t overlook—but your finances are too important not to do thorough research to find the right one. Scour the internet, talk to friends and family, get advice from experts, and ask yourself these questions before deciding on a bank to trust with your finances in college.

For more advice and helpful blogs on student finances, check out the “finances” tag and get smart about your money.

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About Callie McGill

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