To investigate student checking options, NerdWallet compared university credit unions to the big banks on campus. We analyzed which is better for students in terms of fees, accessibility, and perks. Our findings showed that university credit unions often put up a good fight, beating banks 88% of the time. To compare banking options at your university, check out our student checking comparison tool.
NerdWallet recommends considering these three factors when choosing the best student checking account for your needs.
1. Consider Accessibility
An FDIC survey found that 46% of respondents reported that the location of a financial institution is the most important factor in choosing a checking account. It makes sense to want to bank somewhere that’s convenient for you and has surcharge-free ATMs on campus.
When looking for accessible and convenient financial institutions, don’t forget about credit unions. Although they are small and have fewer branches than banks, many credit unions participate in shared branching and ATM networks, allowing members to use other credit unions’ branches or ATMs for free. The Co-op network, for example, has ATMs at 7-Elevens and Walgreens all over the country. The network includes 30,000 ATMs across the US, dwarfing Wells Fargo’s paltry 12,000 ATMs.
Internet banks are another option for computer-savvy students. They usually offer ATM surcharge rebates, which may be especially beneficial for students because they tend to move around a lot. Checking accounts at internet banks usually have no monthly checking fees, waived or reimbursed ATM fees, and competitive interest rates (often higher than those for savings accounts at brick-and-mortar banks).
2. Determine who has the lowest fees
Although free checking accounts for non-students are more rare than unicorns, free checking abounds for students. In NerdWallet’s research of financial institution options at over 80 universities, we found that 82% of student checking accounts at banks and 99% of student checking accounts at credit unions were completely free, with no minimum balance requirements.
Monthly service fees aren’t the only fees to keep an eye out for. Financial institutions vary in their out-of-network ATM fees and overdraft charges as well. Our research found that the median fee for two out-of-network ATM transactions per month was $4 for banks and $0 for credit unions, but financial institutions charge up to $3 when customers use another bank’s ATM to withdraw funds—and the ATM itself charges another fee on top of that.
Overdraft fees vary widely as well. The median overdraft fee at credit unions was $28, while the median overdraft fee at banks was $35. TCF Bank, for example, charges $37 per overdraft, while the University of Nebraska Federal Credit Union only charges $20 per overdraft.
3. If it’s a tie, bonuses can tip the scale
Student checking accounts often come with perks and freebies that non-students don’t receive. When PNC partners with a university, they give students one overdraft fee refund if an overdraft occurs within one year of the account opening. Credit unions often give students free financial literacy classes and refunds of ATM surcharges. Perks range from free swag to free cash just for opening an account to restaurant gift cards. Check out our favorite university credit union perks.
Other Expert Opinions
- Stephen Trapnell, Vice President, Director of Communication Strategies for Susquehanna Bank
“College is a great time to open a personal checking account and start developing a relationship with a bank. However, with all the banking options available to students, how can you decide where to put your money? The first step in choosing a bank is to make a “wish list” of the features that are important to you. Here are a few points to consider:
1. Location. If you won’t have a car to get around, choose a bank with branches and ATMs near campus. While you can opt to conduct some banking activities online, it’s smart to have a brick and mortar location nearby if you need to talk to a real person.
2. Student Checking. Check to see if the bank offers a checking account geared specifically for students, which may waive monthly service fees and minimum deposit requirements.
3. Features. Do you want free online, mobile and text banking services? How about the freedom to use other ATMs without incurring excess fees? These features make it convenient to bank anywhere, anytime – and they’re even more essential if you use a bank that doesn’t have locations near both your college and your family’s home.
It may also be important to you that a bank offers “green” or paperless options, such as receiving e-statements in lieu of traditional bank statements. Once you have an idea of the features you’re looking for in a bank, utilize online search engines for customized recommendations that fit into your new college student lifestyle.”
- Tony Aguilar, founder of Amiti Advising
“When our customers are looking to open a bank account there are a number of
factors we look into:
1. Fees. This is the most important factor in determining a bank
account. We want an account that has zero or no fees. Many banks charge
$15/month just to have an account with them. That’s $180 a year!
2. ATM Reimbursement. This is a big deal for college students. They
are going to have many late nights where they need to pull out cash and
getting hit with a $3 fee from the ATM & $3 from their bank can take its
toll on a budget. If a student were to do this just twice a month that
would be $156 in ATM fees for the year!
3. Online Bill Pay. It’s 2012 and college students are very tech savvy
and do everything online. Their bank must do the same. They need to be able
to pay for their bills, tuition, and books all from their laptop.
4. Deposit via ATM or Smart Phone. We look for a bank that is ahead of
the curve in technology and allows its customers to deposit checks via ATM
or smart phone.
5. No minimums. We want an account that does not have a minimum
balance for checking and savings accounts. Many banks charge a fee if a
balance falls below a certain point.
6. High interest savings. This is really not too big of a deal right
now, since all savings account interest rates are ridiculously low – we
still recommend our customers using ING Direct or Ally to get the highest
yielding savings accounts possible.
7. Savings buckets. We recommend our customers getting an account that
allows them to create multiple buckets in their savings account. This
allows them to create a bucket for an emergency fund, vacation fund, car
fund, etc. This helps them see the progress they are making towards each of
- Shay Olivarria, Financial Education Speaker & Author, Bigger Than Your Block
“1. ATM availability – College students love to travel both domestically
and internationally, so having a financial institution that affords you
plenty of ATM access is key. Credit unions have the largest ATM network
because they work together to share ATMs using the Co-op system.
There are more than 28,000 ATMs where you can access an ATM for free in the
US. 7-Eleven also has an agreement that allows credit union members to use
the ATMs in 7-Eleven for free.
2. Customer service – People don’t usually think about customer
service, but it’s really important that you feel comfortable at your
financial institution. You should be able to ask questions and get clear
3. Loan rates – Some college students purchase homes and cars while in
schools and others wait until after undergrad. Either way, creating a
relationship with an institution that you can grow with is important. Even if you’re not
looking to take a loan yet, you want to build a relationship with the
financial institution you’d like to do business with later.
4. Online/mobile platforms – Take note of what kinds of technology your
financial institution offers. Make sure that they offer online banking. If
they have an app for your phone then that’s even better.
5. Insurance – Both credit unions and banks insure account holders
against loss. Credit unions are insured by the NCUA and banks by the FDIC
for up to $250,000 per account holder.”
- Matt Wallaert, behavioral psychologist
“Think local. Most colleges and universities have an affiliated credit union or bank that has a presence on campus. And while you may be able to get a student checking account with better rates and a larger ATM footprint by going to a national bank, most students spend most of their time on campus. And in an emergency, when you truly need to talk to a bank agent immediately, you want to have them close by and attuned to your needs. It is easy, as a student, to get caught up in all the other stresses of school and to put off financial decisions. Simply have a branch that you can walk to between classes can be the difference between taking care of a financial issue and not. Think of it like having a gym next door instead of across town: you are much more likely to go, and thus much more likely to address your finances, when it is close by.”