Even if you don't have a lot of personal expenses, there are good reasons to open a student bank account. You can go to any bank or credit union and get your account started. If you're under the age of 18, the financial institution may require a parent’s name on the account. Opening your first account can jump start your financial future. But maybe you feel it's not the right time. If so, here are seven reasons why you need to open a student bank account.
1. It’s Free
Whether you're opening a student checking or savings account, most financial institutions do not charge students a monthly maintenance fee. Typically, bank maintenance fees can range from $5 a month to $25 a month, depending on the account features. But since many young adults have limited funds, most banks waive this fee when students and teens open a student bank account.
2. Requires Low Opening Deposits
When opening a bank account, the financial institution requires a minimum opening deposit. Sometimes, this minimum can be between $25 and $50. But as you'll discover, most teen or student bank accounts can be opened with as little as one dollar. You might need to shop around and compare fees among different banks.
3. Start Saving Early
You're never too young to get serious about saving money. As a teen or young adult, it's tempting to spend all your money or allowance on stuff, such as electronics, clothes or fun. It's okay to enjoy your money, but since you have limited financial obligations at this point in your life, it’s the best time to get your savings account off the ground. With a savings account, your money is accessible, but not too accessible. Therefore, it'll be easier to grow your account.
4. Teaches How to Manage Money
Getting a student bank account is your first lesson in money management. With an account, you have to track how much you deposit in your account, plus you have to pay attention to how much you're spending. This sets the stage for how you'll manage money as an adult.
5. Safer than Keeping Money under the Mattress
Some young adults choose to keep allowance money and other funds under their mattress or in a shoebox. However, these options don't provide the best security. Someone can break into your home and steal your money, and unfortunately, you won't get this money back. With your cash in the bank, funds are FDIC-insured up to $250,000. So, if the bank fails, your deposits are safe.
6. Stepping Stone to a Credit Card
If you open your first bank account, this could be a stepping stone to a credit card. Many teens and young adults apply for a secured credit card as soon as they're ready to manage and build credit. If you have a bank account with a financial institution, you might be able to get a secured credit card or an unsecured credit card through the same bank.
7. Ready to Exert Financial Independence
Maybe you're tired of relying on mom and dad for cash. If you get a part-time job and you want to save up for a car, a cell phone or electronics, getting a student bank account is the first step. Compare savings account rates among different banks and don't discount opening an online savings account. These particular accounts pay a higher interest rate than regular savings accounts.
If you're a teen and you haven't opened your first bank account, now’s the time. Speak with your parents and then visit a bank to get your account started. What are other benefits of having a student account?