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What Is a Student Checking Account and Do I Need One?

Listen up, you guys. If you’re a student who cares about achieving excellence with your money, you’re going to need a checking account. I always recommend young people to get into one as soon as possible. Why? Because it’s more than just a safe place to park your cash or buy things with a debit card—even though I do love those benefits.

Here’s what I really love about a checking account. It’s a great way to learn about smart budgeting and saving. And a student checking account? That’s even better. Let’s see why.

What Is a Student Checking Account?

A student checking account is an account that offers you basic check-writing and debit card services, with a few extras aimed at the 16–25 crowd. If you’re in that age bracket and have a Social Security number or driver’s license, the only other thing you need is proof of your student status. Then just go online or head to a bank branch to open an account.

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A lot of banks will offer you an account with fewer restrictions than you’d find trying to open an ordinary account. Like I said, student checking accounts typically have some features that could help you as you’re starting up college or trade school. Let’s break it down:

  • No service fees. They might offer you this. If so, that’s dope. Or if not, you might see lower-than-normal fees, or the chance to avoid fees by either keeping a certain minimum balance or setting up a direct deposit. (That just means having your employer send your paycheck directly to your account—something I recommend.)
  • Debit card. I love debit cards! Don’t get it twisted here—I’m not talking about credit cards. I do not want any of those in your hands. Credit cards are for people who want to do fake rich things. Debit cards are for people who want a safe and easy way to manage the real money they already earned. Simple! And here’s a tip: When you go to open a student checking account, chances are the bank is going to end up pitching you a student credit card along with it. Do not get sidetracked by the marketing here. Focus on your goals and forget about debt.
  • Savings account. You may have the option to link up with a savings account that you can use for sinking funds. And a lot of times this is a free service! Just be sure the savings account does not require you to sign up for overdraft protection. I don’t recommend it because of the fees involved when you use it. You’re better off just becoming a great budgeter and avoiding overdrafts completely.
  • Mobile banking. I know all y’all have phones. One of the smartest ways to use them is to manage your money. I check my accounts every day just to be sure everything’s high and tight. This kind of app is essential when we get into the saving and budgeting discussion below.
  • Text alerts. Most student accounts offer text or email notifications to let you know when your balance is getting low, or if there’s account activity happening. Believe me, you’ll appreciate those updates if someone steals your card and starts shopping on Amazon. If you want another layer of safety, you can even get ID theft protection.
  • Safe keeping. The money you deposit in a checking account will be insured by the Federal Deposit Insurance Corporation (FDIC). Basically, if something happened to put your bank out of business, you’d still get your money back.

Do I Need a Student Checking Account?

Yes, you do. As you can see, there are a lot of benefits. And I always like seeing students like yourself lay an early foundation of strong financial habits that will lead you to long-term success with your money. Helping you to find smart and safe ways to stack cash is what I’m all about!

With that said though, I want you to chill with me for a minute. Because before you can stack real dollars in that checking account, we need to talk about your why. We need to get clear on what your purpose should be in getting a checking account, and what your bank’s goals are. Trust me, those two are not always the same!

Why Do I Need a Student Checking Account?

Basically, you need a student checking account because it’s going to make you a better budgeter. What? Yes. I get that many people hate the idea of budgeting, but I am not one of those people. And I want to flip that hate you might be feeling for the budget and turn it into love.

How Does a Checking Account Work With Budgeting?

I love to budget. And one of the things that helped me feel the budget love was my checking account. I’m for real! See, when money hits my account from a direct deposit, three words come into my mind: spend, save and give. As you use your checking account, I want you to use those same categories to give every dollar in your account something to do.

Using those categories, you can make something I call a zero-based budget to dedicate every dollar of your income to something important you want to do. That’s all budgeting is, fam! The goal is to keep assigning all the money until you’ve worked down to zero so none of it gets wasted. Now let’s look at what happens if you fail to budget that cash—and what happens when you do.

Let’s say that with my salary, my side hustles and some stuff I sold at a garage sale, I have $10,000 in my checking account. I’m feeling good seeing five figures in that balance! But how long will it last?

If I just ride around town with a debit card in my pocket and no plan for my money, guess what’s going to happen? A little game called “Swipe!” Swipe for a lunch with my friends. Swipe for a date night. Swipe for some new clothes. Hey, ya boy needs to look good out here!

Next thing you know, my game of Swipe has wiped out that balance. Maybe I won’t notice what’s happened to my checking account until that moment I try to swipe for groceries . . . and get declined! Y’all, I think we’ve all been there. And it’s a terrible feeling. You’re spending money on things that don’t really matter at the expense of things that do.

That’s not something you want. And I don’t want it for you either. How can you avoid it? Simple. Budget the bucks before you blow through them. Think spend, save and give.

Spend

Get a pen and piece of paper. Start by putting your checking account balance at the top. You could also use an app or your laptop. I don’t care which format you choose. The only rule is that you have to give every dollar a name, until you’ve taken the original amount down to zero. You’ll start by listing all the stuff you spend money on. Then fill in how much money you need for each item and subtract the amount from your account balance on each line until you’ve covered everything. (If you’ve got a lot left over—nice!—check out Save and Give below.)

In my example, we’ll start with $10,000. (Work hard in school you guys, you’ll get there!) First, list the Four Walls of essential needs everyone has, and the amounts you owe or expect you’ll need:

  • Food
  • Utilities
  • Shelter (your apartment or house)
  • Transportation (gotta have that ride)

As long as you’re taking care of those four, you’re in a really good place. Be sure those are covered before moving along to the categories below. And if you’re at an age where your parents are covering most of your Four Walls, great! You can focus on saving and giving.

Save

Once the Four Walls are covered, your next step is having a starter emergency fund. I recommend students always have $500 saved up to cover problems that come up like a cracked laptop or a car repair. You can’t just leave something like that alone. You’ll want cash available that’s set aside for nothing but those kinds of emergencies. Without an emergency fund, you’ll be tempted to pay for them with loans and credit cards—and that’s something I definitely do not want you to do.

No Debt

If you’re already in some kind of debt today, I want to encourage you. I have personally talked with thousands of people who have gotten rid of it completely. Anyone can live debt-free and build wealth. The key is this: Don’t go into any more debt, work the debts you do have in order from smallest to largest, and pay everything off as soon as possible. In fact, I would recommend paying off all non-mortgage debt right away before looking at any type of investing.

Give

This one is huge. Do not miss out on something I believe might just be the most fun you can have with money, simply giving it away. No one is so far down that they cannot lift someone else up. And you know what? Giving money to someone who really needs it can make you less selfish and serves as a reminder of the true purpose of money—to help other people.

Here’s the bottom line with budgeting. Your money has a way of moving! And if you don’t tell it where to go and what to do, you could lose it all in a game of Swipe!

Work With a Bank You Trust

As you launch into college or trade school, you might not have much money. But banks know at some point you’re going to start having more. And just like you know, the banks definitely have a plan to get at your money for their benefit.

That explains why they almost all offer some kind of student checking account with benefits to appeal to your age group. That’s also why you need to be sure you’ve got a solid plan of your own—and a counterattack you can use that will help you stack cash to your advantage.

Hear me on this. I’m not mad at the marketers. As long as they’re looking to truly serve you, the customer. But as a smart shopper, you have to make sure you only sign up for things that will help you succeed. Here are a few things to watch out for:

  • Credit card offers. These banks aren’t just giving you all these benefits to be nice. They have a plan to make money. One of their favorite ways is by luring you into credit card debt. Don’t do this!
  • Fees. “No fees” doesn’t always mean no fees. (I’m serious.) So you need to be sure you ask what’s really free, and what’s going to get you a charge to your account. For example, banks charge fees to checking accounts for things like maintenance, getting a cashier’s check, wire transfers, using your debit card in out-of-network ATM machines, or for overdrafts. But since there are banks who don’t charge these fees, it only makes sense to find one that lets you keep your money.
  • Expired benefits. You’re not going to be a student forever. And some of the benefits you enjoy with a student checking account could expire once you graduate or leave school for any reason. Be sure you know your bank’s conditions for student status and fees.

If you keep all that in mind, you’ll open the right kind of checking account—which is a smart move for students. It gives you access to a debit card, usually without fees. And it’s a good way to get the hang of budgeting, saving and spending.

If you’re looking for a dope bank, check out Gazelle, a new banking experience from Ramsey Solutions! (That’s where I work, y’all!) We want to help you outrun the normal, debt-driven banking experience so you can stack cash, not lose it in stupid bank fees. If you’d like to become one of the first beta users, sign up today!

Anthony ONeal

About the author

Anthony ONeal

Anthony ONeal is a #1 national bestselling author, financial expert and host of the popular online series “The Table” on his YouTube channel. He has appeared on Good Morning America, the Tamron Hall Show, the Tom Joyner Morning Show and the Rachael Ray Show, among others. Since 2015, Anthony has served at Ramsey Solutions, where he teaches young adults how to budget, live without debt, avoid student loans and build real wealth for their future. Learn More.