In college, a few dollars here and there can mean the difference between going out and having to stay in, ordering a pizza and heating up a can, taking a trip on spring break and going back home instead. You don’t want your bank deciding your social life, do you?
So when you see promotions on campus for a student checking account, perhaps even with your school’s name and seal attached, be skeptical. As a NerdWallet study found, these university-affiliated accounts aren’t your best choice.
Our favorite checking accounts aren’t specifically for students, but they are ideal for college living. Students should choose an account that charges no overdraft fee, the penalty that can turn a $4 slice into something costing closer to $40. Here are our picks.
Simple
The online bank Simple lives up to its name with an easy-to-manage account that makes for a smooth mobile banking experience.
Simple charges no fees, not for overdraft or monthly maintenance. If you try to spend money you don’t have, the transaction is declined. You get a debit card you can use for purchases and to withdraw cash from one of its 50,000 partner ATMs. And from your phone you can pay bills, deposit checks, and set and track your financial goals with the Safe-to-Spend budgeting tool.
There are a few limitations. One, depositing cash is complicated; you can buy a money order and upload it through your phone or send it in by mail. Two, you don’t get a checkbook; however, you can request a cashier’s check free of charge. You can still do these things; they just take longer.
» MORE: NerdWallet’s best online checking accounts
Capital One 360
Capital One 360’s online checking account too charges no overdraft fee and will decline transactions in excess of your balance. But if you’d rather spare yourself some embarrassment at the register, this account has the best overdraft protection policy around.
Instead of charging a flat fee, perhaps multiple times per day, Capital One 360 lets you open a line of credit to cover overdrafts. You pay interest on the money borrowed, but so long as you quickly replenish your account (say, within a few days or a week), you’ll pay a penalty of only pennies instead of $35 or more.
Capital One 360 carries no monthly fee and, for study-abroad types, no foreign transaction fees. And even with 40,000 ATMs nationwide, you are free to stray from its ATM network. You won’t be charged domestic or international out-of-network fees (but the ATM owner might ding you).
» MORE: NerdWallet’s best checking accounts and debit cards
BBVA Compass ClearSpend Card
Prepaid debit cards are a good way to avoid overdraft fees — you’re limited to however much cash you’ve loaded onto the card — but they come with fees of their own. The BBVA Compass ClearSpend has some of the lowest fees, and it refunds one out-of-network ATM charge every month.
There’s a one-time initial loading fee of $4. Balance inquiries are free through BBVA, and you can load funds onto the card for free by setting up direct deposit or by visiting a BBVA branch (in Alabama, Arizona, California, Colorado, Florida, New Mexico or Texas). Funds can also be loaded at any Visa ReadyLink location, but fees may apply, usually less than $5. And you can’t write checks off the account.
This prepaid debit card is a good alternative if you think you need to learn some budgeting skills. You can monitor your funds and keep track of your expenses through the ClearSpend mobile app.
» MORE: NerdWallet’s best prepaid debit cards
Keep it easy
All of these checking accounts have one theme in common: no overdraft fee. Plus, fees in general are kept low. You’re not working full time yet, and money might be tight. Hang on to as much of it as you can.
You’ll notice that none of these accounts have the word “student” in the title. Don’t limit your options. If you really want one, Chase and Wells Fargo offer student checking options that waive monthly fees, but that’s about the only free pass you’ll get. Instead, look beyond the student union, off campus, out of town and online, and find a checking account that will let you fully enjoy your time in college.
Melissa Lambarena is a staff writer at NerdWallet, a personal finance website. Email: mlambarena@nerdwallet.com. Twitter: @LissaLambarena.
METHODOLOGY
To choose the best accounts we looked at more than 30 financial institutions that offer student checking accounts or regular checking accounts: the largest U.S. banks based on assets, debit card volume and internet search traffic; the nation’s largest credit unions with broad-based membership requirements; and other notable emerging players in the industry.
Financial institutions surveyed included: Alliant Credit Union, Ally Bank, Bank of America, Bank of Internet USA, BB&T Bank, BBVA Compass, BMO Harris, Capital One, Chase, Connexus Credit Union, Fifth Third Bank, Green Dot Bank, GO Bank, Key Bank, MyCBB, Moven, Navy Federal Credit Union, Pentagon FCU, PNC Bank, Regions Bank, Santander, Schwab, Simple, State Employees’ Credit Union of North Carolina, SunTrust Bank, TD Bank, Union Bank, U.S. Bank, USAA, Wells Fargo.
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