Banks recognize that students who open checking accounts with them could develop into lifetime customers for services ranging from mortgages to retirement savings vehicles. Therefore, banks have the incentive to accommodate students. But, it is up to the students to shop around for which institutions provide the best deals for their specific needs. Not every student financial situation is exactly alike.
However, essentially all students should be looking for as much “free” as possible. That would include no fee to open and maintain the account, to have a low average balance, writing unlimited number of checks, obtaining a debit card, unlimited transactions at the bank’s own ATMs, online access and bill payment, and text or email notification when the account dips below a certain point. The more of those features banks offer free, the better.
But free usually comes with hitches. That is why students have to read the fine print or what lawyers call “terms and conditions.” Fees could be imposed if the balance goes beneath a stated minimum. Although there might be unlimited check writing, the cost for pre-printed checks could be higher at one bank than another. Potentially costly could be what one bank might charge for “bounced” checks, that is those sent without sufficient funds (NSF) in the account. Students should hunt for “forgiveness” options, such as no penalty for the first offense.
For some students, features that are worth hunting for would include ability to link their credit cards and saving accounts to their checking account and allow transfer of funds. That prevents checks from bouncing and incurring penalties. Usually a fee is charged for the transfer but that can be lower than the one for NSF. Students have to comparison shop for those kinds of fees. Sometimes free, sometimes for a fee, students can also arrange for funds to be regularly transferred among accounts. For example, part of their earnings from a part-time job deposited into checking can be put into savings. Useful for those who attend school and live in different locations or travel is refund of transaction fees at ATMs which are not part of the bank’s network. According to NerdWallet those can range from $2 to $3.00 domestically and up to $5 a transaction internationally.
But the most important feature for students who are beginning to acquire financial literacy is the sense that the bank cares about them and is equipped to respond to their concerns in all mediums, be it the smartphone or onsite. Students have to feel comfortable asking questions such as, “I am running up a credit card balance. What can I do?” Based on the responses they receive, they will likely make the decision to remain a customer or go shopping again for another bank when they get their first job.