Money Matters Lesson 1: Free Student Checking

[College kids are notorious for being poor. And why shouldn't we be? We take out student loans to pay for private universities, can barely balance a part-time job with our full-time courseload, and the only "balance" we're familiar with refers to the number of points left on our dining hall cards. Oh, did I mention many of us tend to splurge every extra penny on PBR's at the campus bar?

By Kathryn S

Ok, before everyone gets up in arms about every generalization I just made, let me clarify: if you disagree with everything I just said, you probably don't need this column. But if you're nodding along because you're officially an adult and still don't know how to manage your money, then you might want to pay attention every week, because I'm going to (try to) get you through this, and make you a successful saver and a wise spender. Starving college students of the world, I bring you Money Matters: a Guide to Handling Your Income (or Lack Thereof).]

This week, I’d like to introduce you to a splendid gem called Free Student Checking. Now, normally, banks will hold your money for you, but they like to find sneaky ways to make a few bucks back themselves. Some checking accounts, for example, have a minimum balance that you always have to have in your account. If your balance goes below that minimum, you get a fine.

Yeah, that’s right. You have to PAY your BANK for being too poor to have any money in the account that consists entirely of your own money that you started out with in the first place. I understand credit card late fees– with credit, you’re spending money you don’t necessarily have– but a fine on your own money? That’s bullsh*t.

Luckily, the banks have caught on to the fact that college kids won’t open accounts if they know they won’t be able to keep up with the minimum account balance… and the fact that once we’ve graduated and become successful career men and women, they can switch us to premium accounts and fine the ever-loving sh*t out of us.

Free student checking comes with a variety of perks. First of all, it’s free. No interest, no fines (unless you overdraw), no minimum balance, and they usually only require about $50 or so to open them. So, just put off buying one textbook for about a day and you’ll have the money to open a checking account and become a real grown up, personalized checks and all.

Before you hop over to the first bank in sight, however, it’s wise to do some research. Because college students should ALWAYS be on their toes for a bargain, whether it’s free food sponsored by the PanHellenic Society, Penny Night at the Pub, or a free toaster with every new bank account.

Seriously, though, shop around. Some banks will give you MONEY just to sign with them. I got $50 last summer for opening a new direct deposit account with M&T Bank, for example, and when I used Wachovia in the past, they were always advertising bonuses for students who got friends to open checking accounts as well. Search for banks in your area on Google Maps and see if there are any perks for opening a new account.

Then, proceed to step two:

Check out the long-term benefits of the account. Remember, you and your new bank are going to have at least a four or five-year relationship, and you want the relationship to be as much a one way street as it can be (in your favor, of course).

Currently, Bank of America has an online student checking offer, which includes a “Stuff Happens” card, good for a one-time fee refund (read: if you overdraw once, you can waive the pricey fine); a free check card (read: debit card); free online banking with unlimited bill pay (read: no fees for paying bills online); and an easy way for your parents to deposit money into your account (read: you can still beg for cash).

Wachovia’s Free Student Checking also offers one-time overdraft protection, but also includes a free savings account, for those of you motivated scholars who actually hope to put some cash away for a rainy day. AND Wachovia’s plan includes a “Way 2 Save” program, which encourages students to make debit card purchases and pay bills online, allowing you to accrue cash-value points for every check, purchase, and payment, in addition to a rebate on the money you’ve saved in your account each year. Talk about rewarding responsibility!

Other perks include Key Bank‘s ATM fee reimbursement plan, Washington Mutual‘s reward-earning debit card, and Meta Bank‘s checks with your school logo on ‘em (for you spirited savers out there)!

The bottom line is, you’re going to have to start managing your money eventually, so you may as well take advantage of the student-friendly perks of free checking accounts. Along the way, you’ll learn to balance your checkbook, make financial transactions, and become more aware of how much you’re earning and spending. Even if you take advantage of the “no minimum balance” advantage and constantly flirt with overdrawing your account, at least you’re getting started.

By the end of this series, you might even have enough to call “savings.”