Know All Your Banking Options When Going Back to School

How to evaluate the best choice for banking at your school.

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Back-to-school season is an exciting time for students, but purchasing all the necessary supplies and settling onto campus can also be expensive. One aspect of returning to school that should not be costly is your banking. Too often, students pick the large nationwide banks for their student checking when better options exist right on campus in the form of university credit unions. While you may see big banks giving out T-shirts across campus and advertising “free student checking,” be sure to know all your options. Here are a few tips to help you save money and compare the best choice for banking at your school, as taken from NerdWallet’s Student Checking Tool.

Avoid Unnecessary Fees

Let’s start with the low-hanging fruit: fees. Unfortunately, banking fees are now commonplace, but some basic knowledge can help you avoid paying unnecessary charges. While a few dollars to pull money out of an ATM may not seem like a lot, this can quickly add up. For budget-minded college students, it is critical to choose a bank that minimizes your susceptibility to fees—your Spring Break vacation may depend on it!

Many of the large nationwide banks waive monthly maintenance fees for student checking accounts as long as certain conditions are met. Some common examples of these waivers include performing all your banking online or through ATMs (avoiding teller or branch transactions), or maintaining a minimum balance. Chase College Checking waives its $6 monthly fee as long as students are enrolled at a school up to five years. Although some accounts may advertise “free student checking,” it is important to learn all the conditions and fine print so you are not surprised with fees later on.

As important as monthly fees are the charges associated with everyday transactions, such as out-of-network ATM withdrawals and overdraft fees. Out-of-network ATM surcharges can range from $2 to $5 a pop, equivalent to a late-night snack run! Overall, university credit unions charge less for out-of-network ATM transactions and many include several free transactions per month. By researching on-campus banking options at more than 80 major universities, NerdWallet found that 57 percent of credit unions offered at least one free out-of-network transaction per month, compared to only 18 percent of banks.

Accessing Your Money

In addition to being mindful of fees, students should choose a bank that provides easy access to their money. Although you may be used to seeing certain banks at every corner in your hometown, it’s important to research the banks and ATMs that are located on, or directly near, your campus. It is no surprise that university credit unions often have more convenient locations for students than big banks, with more branches and surcharge-free ATMs located on campus. Out of more than 80 universities researched, NerdWallet found that 72 percent of university credit unions had branches on campus, while only 54 percent of banks had branches located on campus.

Many students travel far from home for school, and therefore want to be able to bank both on campus and in their hometown. While this may seem to give an advantage to nationwide banks, credit unions have joined together to create networks that sometimes have larger footprints then even the big banks. For example, Stanford Federal Credit Union is a member of the CU Service Center, a network of Credit Unions encompassing 6,000 branches nationwide. ATM networks, such as All-Point, offer surcharge-free ATM networks that dwarf that of individual banks.

Take Advantage of Bonus Perks

Due to their close associations with the schools, credit unions are able to offer unique perks that nationwide banks cannot match. For example: Metro Credit Union (serving Boston University, Boston College, Tufts University) offers a $0.03 reward on every debit purchase up to a maximum of $250 per year, which is even better than most rewards credit cards. Further, many credit unions offer refunds of other banks’ ATM fees. This means customers can use any ATM across the country and pay no surcharges.

Many credit unions also offer free financial literacy programs that provide a great opportunity for students to learn how to manage their personal finances. Many times these seminars are provided right on campus. Navigating your personal finances is now more complicated then ever, and programs like these can help you avoid fees, choose the best banking options, and build credit responsibly.

As you return to campus this month, be sure to know all your options before committing to a bank. One final note: Just because you receive information on banking from your school’s administrative offices does not mean it has been vetted as the best option for you. Many banks have exclusive agreements with schools, and the only guarantee you have in choosing the best banking option is through doing the research.

Joseph Audette is the VP of Education and Financial Literacy for NerdWallet, a personal finance website dedicated to bringing unbiased advice on students finances, free scholarship search, and EMV chip credit cards.