Cash back benefits are no longer just for credit card users. Learn how to use Discover® Cashback Debit to get the most out of it.
September 29, 2023
Making money for spending money? It might sound too good to be true, but it’s a reality for some debit card holders. Debit cards like the Discover Cashback Debit card now offer a wide range of rewards and benefits to checking account holders, who are enjoying extra money in their pockets, added convenience, and more peace of mind thanks to all the advantages.
Lately, debit card benefits have started to include overdraft protection, receiving your paycheck early,1 online privacy protection, and more. But often the biggest benefit for debit card holders is the cash back they earn on purchases made with their cards.
What does ‘cash back’ mean?
As a debit card benefit, “cash back” refers to money that a bank adds to your checking account in exchange for using the debit card associated with that account. The amount of money you receive thanks to a debit card’s cash back benefit can depend on several factors, such as the financial institution, the type of card, and the type of transaction. For example, some financial institutions will reward customers with a percentage of the amount they spend with their card, while others may give customers a predetermined dollar amount for using the card at particular stores or restaurants. Some financial institutions restrict rewards to certain categories of purchases, such as gas or travel. Each financial institution and card has its own rules for what it considers a qualifying purchase, so make sure you understand the terms.
How does cash back work on debit cards?
Cash back rewards for qualifying purchases made with your debit card will typically appear in your account after the close of each statement period. Depending on your bank, the money could be added into a dedicated section of your online banking portal for you to redeem, or it could be directly deposited into your checking account. Make sure you understand how cash back works for your particular debit card so that you know when you’ll see the funds, how much you’ll receive, if there are any limits, and what types of transactions qualify.
How does Discover cash back work?
The Discover Cashback Bonus for the Discover Cashback Debit card works by providing 1% in cash rewards to customers on qualifying purchases. Discover Cashback Debit card users can earn 1% cash back on up to $3,000 in debit card purchases each month.2 That’s potentially $30 per month—or $360 per year—back in your pocket!
Earn cash back with your debit card
Discover Bank, Member FDIC
When does cash back show up on Discover Cashback Debit Accounts?
Discover Cashback Bonus rewards will post to the Rewards Detail section of your account summary at the end of each month. You can view your Cashback Bonus amount in either the Discover Mobile App or the Online Account Center.
Curious about the best way to redeem Discover Cashback bonus rewards? Well, you’ve got options. Through your account, you can manually transfer your Cashback Bonus into your Discover checking account, Online Savings Account, or Money Market Account. Discover customers are also able to enroll in Auto Redemption, which means Discover will automatically deposit your Cashback Bonus into your Discover Online Savings Account each month. Customers can also manually transfer their bonus to any Discover Credit Card Cashback Bonus® Account.
Ready to open a Discover Cashback Debit Account?
If you’re ready to get the most out of your debit purchases, including 1% in cash rewards2, then it’s time to get Discover Cashback Debit. Not only will you enjoy earning money on your everyday purchases, but you’ll also access amazing benefits like fraud protection, early pay1, and a network of over 60,000 fee-free ATMs.
Ready to get started? Open your Discover Cashback Debit account today.
Articles may contain information from third parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third party or information.
1 Early Pay is automatically available to checking, savings (excluding IRA savings), and money market customers who receive qualifying ACH direct deposits. At our discretion, and dependent on the timing of our receipt of the direct deposit instructions, we may make funds from these qualifying direct deposits available to you up to 2 days early. See our Deposit Account Agreement for more information.
2 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), online sports betting and internet gambling transactions, and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal®, who also provide P2P payments) may not be eligible for cash back rewards. Apple Pay® is a trademark of Apple Inc. Venmo and PayPal are registered trademarks of PayPal, Inc. Samsung Pay is a registered trademark of Samsung Electronics Co., Ltd. Google, Google Pay, and Android are trademarks of Google LLC.
Whether you attend a public or private college—in your home state or another—costs are higher than they’ve ever been. In fact, college tuition costs have nearly tripled over the last 40 years, according to Bankrate.
“The cost of college has gotten completely out of control,” agrees Maggie Germano, a financial coach. And it’s not only tuition. “The cost of room and board, books, and other necessary expenses have been going up, too. This can end up putting students and graduates in lots of debt that may make it difficult for them to get ahead in life.”
That’s why earning money as a student in college can be so beneficial to your financial health, both for today and tomorrow. Not only is the money helpful, but it also gives you a chance to build a budget and manage your own finances—critical skills for being financially secure throughout life.
So, how to make money as a college student? The reality is that it can be difficult for students to earn money while keeping up with their studies. But by taking advantage of scholarship opportunities and choosing part-time jobs for students that fit with their schedule, undergrads can enter the next stage of life with a more stable fiscal foundation.
How can students help pay for college?
It’s never too early to begin planning for the cost of college. Even if your parents started a 529 college savings plan for you when you were young, you can look for additional opportunities to lighten the financial load.
The two most common ways to do that, Germano says, are scholarships and financial aid.
Scholarships and grants
“Students should take steps to apply for as many scholarships and grants as they can even before the start of their senior year of high school,” Germano says. “This will help lower the cost burden for them once they begin school.”
Students should speak with their high school guidance counselor to learn about available local, state, and national scholarship programs. Germano also suggests they take the initiative to research online, as new programs are constantly being created.
Financial aid and loans
Many colleges offer financial aid programs for students from lower socioeconomic backgrounds. While it’s important to speak to your university’s financial aid office directly, students should also consider filling out the FAFSA form, as many schools rely on it to assess eligibility for assistance. FAFSA stands for Free Application for Federal Student Aid, and by filling it out, students will learn which federal aid and loan programs they may qualify for.
Even with a scholarship and other types of aid, many students will still need to take out a student loan, Germano says.
Be cautious, though. “Most students take out student loans without understanding the terms or how much it will really cost over time,” she says. “Talk to your parents, guidance counselor, or other trusted adults about this process so that you’re going into it with as much understanding as possible.”
What bank accounts do students need?
Before applying for jobs, students should be sure they have a place to put their money. Germano suggests students open a checking account and a savings account so they can best manage their money in both the near and long term.
Rewards checking account
Opening a rewards checking account is a great place to start because it can provide cash-back benefits similar to credit cards—and offer the flexibility to make purchases online and with your debit card.
Earn cash back with your debit card
Discover Bank, Member FDIC
Just make sure your checking account features overdraft protection in case you accidentally overdraw your account.
High-yield savings account
Many students find it difficult to keep up with their bills, let alone put money away for savings. It’s important to make an effort, however, since any money deposited in a high-yield savings account can earn compound interest, potentially leading to significant growth over time.
You can also use different high-yield savings accounts to save for multiple savings goals, such as buying a car, paying off student loans, and building an emergency fund.
How can you find the best part-time jobs for students?
If you’re wondering how to make money as a student, a smart first step is to see what part-time jobs are available. The right part-time job can provide you with a reliable income without having to sacrifice time for studying and socializing. Check out these ideas for both on-campus and off-campus part-time jobs for students:
On-campus jobs
Finding a job on campus is a convenient option for how to make money as a college student. You won’t have to worry about commuting, and the workplace is designed to accommodate your student schedule.
In addition to searching around your campus, Germano recommends finding out if you qualify for the federal work-study program at your school, based on your FAFSA application.
To get your wheels turning, Germano suggests these on-campus job ideas:
Resident assistant
Administrative assistant for a department office
Campus bookstore associate
Campus café barista
Tour guide
Tutor
IT assistant
Mail room assistant
Research assistant
Dining hall worker
Off-campus jobs
Consider applying for a job off campus. Restaurants, theaters, and stores near campus are often open to hiring students, though these jobs may not be as accommodating as those on campus.
Germano recommends asking upperclassmen what the best part-time jobs for students are. They may point you in the right direction and could even be willing to give you a referral.
You can also look into remote part-time jobs for students that you can do from your dorm room.
What is a good part-time job for students online?
If you’re wondering how to earn money online for students or how to make money from home for students, you can check job boards for part-time remote work.
Translation work, being a digital assistant, and tutoring are some potential online jobs for students to earn money.
If you speak two or more languages, then translation work could be one of the first places to turn when looking for online part-time jobs from home for students. These roles often involve translating videos, podcasts, or documents—and, if you have knowledge in the medical or legal sphere, it can be more lucrative.
Digital assistants can provide a range of services, from social media management to responding to email or scheduling appointments. These jobs may require a certain level of availability, so be certain to discuss the expectations of this job so you know if you can balance the role with your classes and social life.
If there’s one or more subjects where you really excel, online tutoring could be a good way to make extra money without leaving your dorm. It can also be rewarding to help your fellow students find success.
Can side hustles help with earning money as a student?
If you can’t consistently work at a part-time job, consider more convenient ways to make money as a student—like a side hustle.
There are plenty of side hustles to choose from, including driving for a ride-share app, house sitting, and pet sitting.
Many modern side hustles can be managed through an app, offering a lot of flexibility. It means you can adjust your work schedule based on when you’re available, for example pulling back during finals week so you have time to study. It’s how to make money as a college student without having to take on too big a commitment.
How can college students manage their time between work and school?
It’s important to make sure your money-making ventures don’t interfere with your studies.
“Some students need to work in order to live and support themselves in school, so those students will have to work as much as will support them,” Germano says. “But for those who have more flexibility, try to be realistic about how much work you can take on without sacrificing your schooling and other responsibilities.”
She recommends reducing your work hours if your grades are being negatively affected. One tip: Try designating specific blocks of time for your academic tasks. With your work and school time clearly defined, you can then enjoy any free time you have to the fullest, without stressing about how you’ll get everything done.
Germano says it’s also important to set realistic goals. If anything, plan for a little more time than you think you might actually need to write an essay or study for a test. Finishing early will be more motivating than failing to accomplish a task in time.
You can also try different time management and finance apps. There are plenty of free apps out there that can help you organize your time and money.
Get ready for a fun, financially secure college experience
While keeping your finances in line and building a strong foundation for the future is essential, you should be enjoying this time of your life.
“Many students who have to work to put themselves through school can have a difficult time balancing work and school in a healthy, sustainable way,” Germano says. Finding time for fun and relaxation is critical and should be top of mind to avoid burnout and maintain positive mental health.
With these tips, you can find the way to make money as a college student that works best for you. Once the cash starts coming in, be sure you know how to budget as a college student and how to save money as a student. Earning extra money is only one part of money management for students. You also want to know that every dollar is being spent wisely.
Articles may contain information from third parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third party or information.
Discover Bank does not sell non-deposit investment products (“NDIP”) or provide recommendations regarding NDIP. NDIP are NOT FDIC insured.
Checking accounts provide a useful foundation for many people’s daily financial lives, and some offer additional perks beyond the basics. Called rewards checking accounts, these financial vehicles can benefit customers in a variety of ways. Your money might earn interest, cashback, points, airline miles, or other bonuses (or even a combination of these).
For some, this kind of incentive is a good reason to stash their money at a particular financial institution versus another. However, some rewards checking accounts can involve fees and/or minimum balance requirements which may make them less enticing.
To help decide if a rewards checking account is right for you, read on for such information as:
• What are rewards checking accounts?
• How does a rewards checking account work?
• How do you qualify for a rewards checking account?
• What are reward checking accounts’ pros and cons?
What Is a Rewards Checking Account?
Simply put, a rewards checking account is one that rewards a person for opening and using the account. Those bonuses can take a variety of forms. Consider this:
• A standard, no-frills checking account may have no monthly fees, minimum balance requirements, or minimum opening deposits. However, the perks are generally equally basic: a nonexistent or nominal annual percentage yield (APY), if any no ATM surcharge reimbursements, and often no signup bonus.
• This kind of standard checking account can be attractive for some, but those seeking to earn money for their banking loyalty might prefer a rewards checking account instead.
• Though the specific perks vary by account, you can typically find a checking rewards account that offers a higher interest rate or cash back. You might also be offered airline miles, a signup bonus, free identity theft protection, cell phone insurance, and reimbursement for ATM fees.
💡 Quick Tip: An online bank account with SoFi can help your money earn more — up to 4.50% APY, with no minimum balance required.
How Does a Rewards Checking Account Work?
Some checking accounts with rewards have criteria for earning perks each month. For instance, a bank may require you to:
• Use your debit card for a minimum number of transactions each month
• Maintain an average minimum account balance
• Receive a set number of direct deposits equal to a specified value
• Enroll in services like e-statements or online bill pay
If the reward is a higher APY, you will likely earn that in the form of monthly interest on your bank’s payment schedule, deposited directly into the account. If the checking reward is cash back, the bank may offer multiple ways to redeem the cash within the mobile app. Similar to cashback credit cards, you can often convert points into airline miles or other perks — or just receive cash in your account.
Perks of a Rewards Checking Account
The perks of a rewards checking account will vary by bank but might include:
Cash Back
Cash back is usually expressed as a percentage of the transactions made with a debit card; this might also be structured as points or even airline miles.
Interest
A rewards account may be an interest-bearing checking account. If so, it will offer an APY that is higher than the zero or the very low rate usually offered by most checking accounts.
Signup Bonus
A rewards checking account may pay a one-time bonus for signing up for a new account and meeting specific criteria.
ATM Fee Reimbursement
A rewards account may offer refunds for expenses incurred for using out-of-network ATMs.
Other Perks
Among the other rewards you may see offered are ways to earn airline miles, shopping discounts, cell phone insurance, and identity theft protection, among other options.
Some rewards checking accounts may offer a combination of these perks.
Ready for a Better Banking Experience?
Open a SoFi Checking and Savings Account and start earning 4.50% APY on your cash!
Who Should Use a Rewards Checking Account?
A rewards checking account can be a good option if you regularly use your debit card for purchases and keep a substantial amount of money in your checking account. If you do not have a rewards credit card, a rewards checking account can serve as an alternative way to earn money for spending money.
As mentioned, some banks have special requirements for members to earn rewards. Read terms and conditions carefully. If you cannot meet account requirements for the reward, the account might not be right for you, especially if there are monthly maintenance fees.
💡 Quick Tip: Are you paying pointless bank fees? Open a checking account with no account fees and avoid monthly charges (and likely earn a higher rate, too).
How to Qualify for a Rewards Checking Account
Qualifying for a rewards checking account may vary depending on the bank, but, as mentioned above, there tend to be common core requirements for earning rewards, such as:
• A minimum number of debit card transactions in a month
• An average daily minimum account balance
• A minimum number (or value) of monthly direct deposits
If an account comes with a signup bonus, the bank likely has a set of requirements you’ll need to meet to snag that cash. This may include enrolling in direct deposit to get you started.
When considering a rewards checking account, it’s wise to read the fine print before opening to ensure you fully understand the requirements. Opening a checking account is typically a simple process, but you do want to make sure you understand the details before you sign up.
Pros of Rewards Checking Accounts
Here are some of the benefits of a rewards checking account, though perks will vary by program:
• Earning potential: Whether through a higher-than-average APY or through cash back on debit card purchases, the main draw of a rewards checking account is often earning money (or more money) for doing the banking you would do anyway.
• Tax implications: In general, the Internal Revenue Service (IRS) sees cash back as a rebate for or discount on something you purchased, so you won’t have to pay taxes on that money. Not a bad deal at all! However, if the reward for the account is a high interest rate or a signup bonus, you should expect to receive an IRS Form 1099 from your bank for that income.
• Fees: Some rewards checking accounts charge monthly fees (some of which might be waivable), but other rewards checking accounts are noteworthy for being fee-free.
Recommended: Pros and Cons of No Interest Credit Cards
Cons of Rewards Checking Accounts
Depending on the individual and their financial style and goals, there may be some downsides to a rewards checking account:
• Limits on rewards: Some bank programs cap the rewards at a set amount each month, meaning there could be a limit to the amount of cash back you can earn.
• Better rewards elsewhere: Rewards credit cards may offer more cash back than a rewards checking account. However, these cards often have credit score requirements that make it more difficult to qualify. You probably need a credit score in the good to excellent range, meaning 670 or above.
• Minimum balance requirements: Some banks have minimum balance requirements to earn the reward. If you cannot meet the requirement or do not wish to keep that much money in a checking account, the account might not be the right fit.
• Fees: While some rewards checking accounts have no fees, others do charge monthly maintenance fees that can make the rewards less attractive or possibly even negate them.
Cashback Checking Accounts vs Credit Cards
You may be wondering whether a cashback checking account or credit card is the better fit for you. See how they stack up here:
Cashback Checking Account
Cashback Credit Cards
Provides a secure hub for daily finances
Provides a line of credit for purchases
May charge fees
Charges interest
Earn cashback typically through debit card use
Earn cashback typically through spending with credit card
Is a Rewards Checking Account Worth It?
A rewards checking account with cash back can be a good fit if the conditions to earn the perks are no problem for you.
• You might already be in the habit of swiping your debit card for everyday purchases or this prospect doesn’t faze you. If so, then a rewards checking account with cash back might be worth it. It can be easy to manage a checking account like this and make your money work harder for you.
• If you like to keep a large sum of funds in your checking account to cover automatic bill payments, you might enjoy the earning potential provided by a high-interest checking account even if it has a higher-than-usual balance requirement.
Is a Rewards Checking Account Right for You?
Each person has a unique financial situation and goals. Here are some considerations that may help you decide if a rewards checking account is right for you:
• If you want to earn interest (or more interest) on cash you have sitting in your checking account, a rewards account might be a good choice for you.
• If there are perks that you could reap for behaviors you engage in (swiping your debit card, receiving direct deposit) or don’t mind adopting, this kind of account could work well for you.
• Not a person who has a rewards credit card? A rewards checking account could give you some of the same perks.
Opening a Checking Account With SoFi
Rewards checking accounts are checking accounts that offer special incentives to members, such as cash back on debit card purchases, high interest rates, or ATM fee reimbursements. SoFi could be the right bank for you if you’re looking for these kinds of perks.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
Better banking is here with up to 4.50% APY on SoFi Checking and Savings.
FAQ
What are rewards in banking?
Rewards in banking refer to incentives and perks that account holders receive. They might be a signup bonus for a new account, a higher-than-average interest rate, or checking account cash back in the form of points, miles, or actual cash that can be deposited into your account or, for a credit card, applied toward your statement.
Why do banks offer points or rewards?
Banks offer points or rewards to entice consumers to choose their accounts or cards over competitors. Once you become a member, rewards ensure you continue to engage with the bank’s product, either by depositing more funds into your account or using your debit or credit card for more daily purchases.
Are bank rewards interest?
Bank rewards can come in the form of higher interest. For example, the current national average interest rate for a checking account is 0.43%, while rewards checking accounts may offer a higher than average interest rate, often 1.00% to 3.00% or higher. The interest that you earn is taxable, while cash back typically is not (it’s considered a rebate).
Can you earn points on a checking account?
Some checking accounts do allow you to receive points as a reward. For instance, you might receive one point for every dollar or two you spend with your debit card.
Are bank rewards worth it?
Whether or not bank rewards are worth it depends on your financial situation and preferences. Do you meet the criteria for a rewards checking account (such as swiping your debit card often enough or receiving a certain dollar amount of direct deposits)? Can you handle any requirements such as monthly minimum balance or account fees, if assessed? If so, earning interest or receiving other perks could be a smart, money-wise move.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit activity can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
SoFi members with Qualifying Deposits can earn 4.50% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.50% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 8/9/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet..
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
For many people, college is the first time they’re truly in charge of their own finances. While it’s often a challenge, creating and maintaining a savings account for students is a foundational lesson for building healthy financial habits that last a lifetime.
And saving money as a student has its short-term, practical benefits, too.
“Life throws a lot of expenses our way that are hard to plan for—like when your car suddenly refuses to start when you’re running late for class,” says Jacqueline DeMarco, a freelance writer specializing in personal finance content. “That’s why building out a solid emergency fund is something that every college student should prioritize.”
So, how can you save money as a student in college? These savings tips can help give you some monetary breathing room and a financially secure start in adulthood.
Can you make your bank accounts work for you?
First things first: Make sure you have a good place to keep your savings. That means finding a bank that’s convenient and offers the features and benefits that work best for you.
DeMarco notes that students may feel limited to banks available on or near campus.
“If they aren’t happy with their on-campus bank options, college students may find that an online bank is a better fit for them,” DeMarco says. “Not only do online-only banks offer all of their services digitally, they also tend to have lower fees and offer higher interest rates than banks with expensive brick-and-mortar locations to pay for.”
Whichever bank you choose, DeMarco says there are two accounts every new student should strongly consider opening: a checking account and a savings account.
Setting up both a savings account and a checking account can be done online within a few hours at the bank of your choice.
How can students save money?
Once you’ve set up your checking and saving accounts, it’s time to take the next step toward financial responsibility. One of the best ways to save money for students is by setting up a budget.
How much should a college student spend per month? To determine that, DeMarco recommends subtracting your monthly expenses (essentials like food, utility bills, etc.) from your monthly income (whether it’s from a part-time job, student loans, or money from a parent). Doing this simple math will help reveal how much you can safely spend each month on fun stuff like new clothes or going to the movies—after you’ve put aside a portion for your savings, of course.
Looking to add more wiggle room to your budget? Try these money-saving tips for students:
Shop at consignment and thrift stores
Consignment and thrift stores offer previously owned clothes and other items at a discount. The primary differences are that thrift stores tend to be nonprofit organizations, accept more donations, and are generally less selective in what they choose to sell. Consignment stores are often more selective about the donations they accept, and they pass a portion of the sale to the person who donated—or consigned—the product.
DeMarco notes that consignment stores are not only a smart option for saving money—they’re also a way for students to make extra money by selling unwanted items.
Buy used textbooks
Textbooks can cost students hundreds of dollars if they’re new. Instead of paying full price, consider buying or renting used textbooks. “Many college bookstores offer used options, and online platforms often provide affordable alternatives,” DeMarco says.
You might also be able to recoup some of the money you spent once you’ve finished a class by reselling your textbooks to a used bookstore or an online vendor. “Sometimes I could even sell a book for more than I bought it,” DeMarco says, referencing her time as a student. Cha-ching!
Think about meal planning
So busy with classes and assignments that you find spending money at vending machines for on-the-go snacks easier than planning ahead? Stop, shop, and save. Set aside a few hours each weekend to prepare all of your meals for the week to come. Or, if you live in a dorm, hoard some extra items from the dining hall so you’re ready when those late-night study session cravings inevitably strike.
“Planning meals in advance gives students the chance to make a shopping list and stick to it,” DeMarco says. “As a bonus, having their meals planned will make it easier to avoid the temptation to dine out after a long day of classes.”
Explore free activities
Who says you need to splurge to have a good time? There are plenty of ways to have fun without spending money. Chances are, multiple free activities are happening on and around your campus on any given night. You can look up event calendars online or keep an eye out for announcements. Groups and clubs are always looking for participants and potential new members, so you can bet they’ll be happy to have you. (Plus, a lot of these events have free food.)
Ask for student discounts
It’s common for stores on and off campus to offer student discounts. To reap the benefits, always keep your student ID in your wallet, purse, or cellphone case so you can flash it and save some money.
“You’d be surprised how many retailers, restaurants, theaters, and entertainment venues offer discounts specifically for students,” says DeMarco, who relied on student discounts to help build her professional wardrobe as she neared graduation. “Plenty of major mall brands offer these discounts.”
Get a cheap coffee maker
Relying on caffeine to get through those late-night study sessions—or just to get moving each morning? Save money on java by buying a coffee maker and becoming your own barista. DeMarco says that a cheap or used French press is easy to use and could save you hundreds of dollars over the course of a year.
Rethink the car
It can be tempting to bring a car to college—whether for grocery runs or the occasional road trip. But the costs of gas, maintenance, and parking can add up quickly, DeMarco says. So leaving that set of wheels at home is another way for students to save money. Most college campuses are great for biking and walking. And many also provide shuttle buses and rides to essential off-campus places like grocery stores—as well as safe rides at night.
Track your savings
As you put these ways for students to save money into practice, DeMarco suggests tracking their positive impact on your budget. That way, you can see how your small saving techniques can add up over time. There are even money-saving apps for students you can download to measure your progress.
Where should college students keep their savings?
As you’re finding new ways to trim your budget, where should you put the money you’ve set aside? DeMarco says you’ve got a few options to consider:
Rewards checking account
While there are better places for long-term savings, rewards checking accounts are a valuable tool for college students as they begin to manage their own finances. Certain online checking accounts will provide cash back rewards based on how much you spend. For example, the Discover® Cashback Debit Account provides a 1% cash back bonus1 as well as overdraft protection if you overdraw your account.
Checking accounts are an ideal place to keep your spending money, funds for paying bills, and income earnings from part-time jobs or side hustles since they allow you to access the cash you need at any time.
High-yield savings account
Starting a high-yield savings account, like the Discover Online Savings Account, in college can make a dramatically positive impact on the rest of your financial life.
DeMarco recommends a high-yield savings account for any money that students may not immediately need but still want to keep available. “That way, their savings can earn interest, but they can access those funds if needed,” she says.
Call it a sunny day fund—online savings with no monthly fees
Discover Bank, Member FDIC
And putting aside a set amount of money each month into a high-yield savings account can start earning you compound interest. Even depositing a small amount of savings while you’re in college can add up over the years to make a sizable stash down the line.
CD
CDs, or certificates of deposit—especially those with a longer maturity term—can provide a higher return than a savings account. Use CDs for savings that you don’t expect to need over the CD’s term. The term length for CDs can vary widely. For example, Discover Certificate of Deposit terms range between three months and 10 years, with competitive annual percentage yields.
“If a student has a solid chunk of savings they know they won’t touch for a while, they may want to consider keeping their money safe in a CD, where it’s guaranteed to experience growth,” DeMarco suggests.
Retirement account
If you’re ready to start preparing for the more distant future (always a good idea), you can start by contributing money to an IRA, or individual retirement account. While some college students wait until they have a full-time job that offers a 401(k) plan to begin saving for retirement, the sooner you can get a head start, the better.
Discover offers both IRA CDs and IRA savings accounts.
Why not start saving while in college?
There’s really no better time to start saving than in college. To make your savings dreams a reality, set goals at the start of each semester and check your progress periodically. Maybe even reward yourself (nothing too extravagant, of course) for staying on track. Something as small as the occasional special meal or an activity that doesn’t blow your budget can be a fun way to celebrate those financial milestones.
Saving money can also create some amazing memories with the new friends you’ll be making. Ramen might seem dull, but challenging friends to see who can come up with the best recipe using cheap instant noodles can spice up the fun.
College can be a wonderful experience. And weaving these saving tips into that experience can help build the foundation for a comfortable and secure financial future. Just think: It could all start with a high-yield savings account.
Articles may contain information from third parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third-party or information.
1 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), online sports betting and internet gambling transactions, and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal®, who also provide P2P payments) may not be eligible for cash back rewards. Apple Pay® is a trademark of Apple Inc. Venmo and PayPal are registered trademarks of PayPal, Inc. Samsung Pay is a registered trademark of Samsung Electronics Co., Ltd. Google, Google Pay, and Android are trademarks of Google LLC.
In the past, we’ve discussed the best online high-yield savings account, covered the basics of certificates of deposit, and even explored the beauty of Roth IRAs. But we’ve never talked about checking accounts.
Many people believe checking accounts are the dinosaurs of the banking world. They’re not extinct yet. In the past few weeks, I’ve received two questions about them:
“Where can I get the best rate on a checking account?”
“How much should I keep in a checking account?”
Under certain circumstances a checking account can offer a better return than a savings account! In fact, there are a couple of ways to do it.
Online Checking Accounts
Though they’re not as common as online savings accounts, I was able to find a few high-yield online checking accounts.
Mutual of Omaha Bank, for example, offers a high-yield checking account that is much higher than the average national savings account interest rate. Currently, the Mutual of Omaha Bank online advantage checking yields 0.50% per year.
This account comes with free Bill Pay and free ATM access to 22,000 ATMs.
Rewards Checking Accounts
Believe it or not, there’s a way to earn even higher rates of return with a checking account. Many small community banks and credit unions around the United States offer a special “rewards” checking account, a product administered by a company called Kasasa.
Different banks have different names for this product.
Obviously, these rates are fantastic. There aren’t many places you can earn a guaranteed 6% return on your money right now. Unfortunately, there are a few catches. These rewards checking accounts usually come with some combination of the following limitations:
You must receive your monthly statement electronically — not via snail mail.
You must log into your account at least once per month.
You must make a certain number (generally around 12) debit card purchases. (ATM withdrawals do not count toward this number.)
You must make at least one electronic transaction each month. These include automatic payments to your utilities, for example, or a direct deposit.
The rate only applies to the first $30,000 (or so) in your account. (The cap at some banks is $10,000; at others, it’s $100,000.) The portion in your account above the cap only earns a tiny return.
If you use your debit card often, a rewards checking account makes a lot of sense. If you’re clever (and have a lot of money), you could actually use both types of accounts I’ve described. Put your first $25,000 or so into the local credit union to earn five or six percent, and then put the rest into an online checking account at three percent. (On the other hand, if you have that much cash, you’re probably doing something far more clever with it than parking it in rewards checking accounts!)
How Much Should You Keep in Checking?
This brings us, at last, to the second question about checking accounts. Chris wrote to seek advice on how much to keep on hand:
What is a good rule of thumb for a minimal balance in one’s checking account? I already have a healthy emergency savings account, so my question is, how low should I go? I carry no revolving debt, and I am currently paying off installment debt (student loans), so I could get a guaranteed return on any extra money I put towards debt taken from my no-interest brick-and-mortal checking account.
The answer to this question depends entirely on the rates of return for the savings and the checking accounts, and how the accounts are used.
Though I have an Electric Orange checking account at ING, I don’t actually use it for anything yet. I haven’t fit it into my financial workflow. Instead, I use a normal no-interest checking account at my local credit union. Every month, I transfer a fixed amount there to pay the expected bills. The rest of my money earns interest in savings.
If I were to get my act together, I could transfer some money to Advantis to test their rewards checking account. I’m hesitant to put my entire emergency fund there because I don’t know if I’ll meet the “12 transactions a month” clause to earn the 5% interest. But if I transfered a small amount there and tested it for a couple months, I’d know for certain.
Now I’d like to hear from you folks. What sort of checking account do you use? Does it earn interest? How much? Have you tried one of these rewards checking accounts? How did you like it? Have you tried an online savings account? Or have you given up checking account altogether?
Your first job thrusts you into the adult world and the tricky balancing act of managing your money. The key to a healthy, wealthy, and low-stress lifestyle is not to get rich, but to master this balance as early as possible.
Here are six money-related moves to make during your first job so you feel good about your future.
What’s Ahead:
1. Open a Checking Account and Set Up Direct Deposit
If you don’t have one already, you’ll need a checking account to safely store your money.
The two most common reasons Americans are hesitant to open bank accounts are a) they don’t think they have enough cash, and b) they want to avoid bank fees. But many banks won’t charge you a penny for opening an account. And as long as you maintain the required minimum balance, if there is one, you won’t get charged any low balance fees and might be able to avoid maintenance fees.
The next question would be: which bank? You might’ve heard shifty things about some brick-and-mortar banks in the headlines, so who can you trust? Chime® and LendingClub are two great online-only options for modern banking.
Chime
Designed to help young people build their savings while they bank, Chime offers a safe and rewarding place to keep the money from your first job — and even get it early.*
When you set up direct deposit with Chime, you may be able to get your paychecks up to two days in advance if you qualify for early direct deposit.3 What’s more, Chime not only doesn’t charge overdraft fees but will cover up to $200 in overdrafts for eligible accounts with a feature called Chime Spot Me®. If you overdraw, Chime will “spot” you the money and deduct it from your next deposit at no cost to you.5
For its simple tools and variety of features to help make your life easier when money is tight, this is an ideal first checking account.
Open a Chime account or read our Chime review.
* Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. 3 Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date. 5 Chime SpotMe is an optional, no fee service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each month. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member’s Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime’s discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won’t cover non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. See Terms and Conditions.
LendingClub
If you want a bank with more features that’ll pay interest on your balance, check out LendingClub. LendingClub offers a fee-free checking account that earns interest and cash back.
LendingClub’s Rewards Checking account pays 1.00% APY on balances between $2,500 and $100,000 (and 0.15% on balances above this). It’s not much, but the interest will add up the more you deposit. Plus, you can earn 1.00% cash back on qualifying purchases you make with your LendingClub debit card. And like Chime, users may be able to get their paychecks up to two days ahead of schedule.
Open a LendingClub account or read our LendingClub review.
Related: Best No-Fee Checking Accounts
2. Get the Right Credit Card
Once you’ve opened a checking account, your next step is to apply for a credit card. This can be through your current bank or a new institution altogether.
As a good rule of thumb, you should look for cards that have no annual fees and come with benefits like cash back and free stuff. But as you’re browsing rewards cards, make sure you choose one that actually makes sense for your spending habits.
Most likely, a fancy metal card that offers a high rewards rate on one category wouldn’t be as useful to you as a more basic rewards card that offers less cash back on more categories. Watch out for high annual fees and high interest rates with any rewards card.
One of the best cash back credit cards out there is the Chase Freedom Unlimited®. We recommend this card for anyone looking to build their credit when they start earning money from their first job.
For starters, this card offers a wide array of cash back categories. These are:
5% back on travel booked through the Chase Ultimate Rewards® portal
3% on dining, takeout, and drugstore purchases
1.5% on everything else
For a card with no annual fee that you can qualify for with average or good credit, you can’t do a lot better.
Read our Chase Freedom Unlimited® review.
Secured Credit Cards
Depending on your income and credit score, you might not qualify for the exact card you want. Most unsecured credit cards like the Chase Freedom Unlimited® have income requirements and want to see a certain credit score from applicants. Frankly, it can be tough to meet these as a newbie.
Secured credit cards can be a great option for people applying for credit for the first time. These are called secured because they require a security deposit, which is used as collateral in the event that you can’t pay back your balance. Secured cards tend to be easier to qualify for than unsecured cards but help you build credit all the same.
The OpenSky® Secured Visa® Credit Card is one of the best secured cards out there. With this card, you’ll put down a security deposit of between $200 – $3,000 when applying and this will become your credit limit.
All of your payment activity is reported to the three major credit bureaus, so making your payments on time will set you up for success and a better credit score.
What’s unique about the OpenSky® Secured Visa® Credit Card is that it doesn’t require a credit check or affect your credit when applying.
Read our review of the OpenSky® Secured Visa® Credit Card.
3. Start Budgeting
Budgeting is like driving. When you’re first starting out, it’s awkward, anxiety-inducing, and decidedly un-fun. But eventually, it kind of becomes second nature.
Effective budgeting can help you save money and feel less stressed. Knowing precisely how much money you have and where it’s going means there are no surprises and helps you plan for your financial goals. But making a budget and following it is a whole lot easier said than done.
If you’ve ever tried and failed to stick to a budget, it’s probably because you weren’t using the right tools. Trust us when we say the right tool makes all the difference.
We recommend PocketSmith and YNAB to beginners. If you want to make sure the money you’re earning from your new job is being put to good use, start with one of these budgeting products.
PocketSmith
PocketSmith is not your average budgeting app.
Yes, it’ll track your income and expenses and sound warning bells when you’re about to go over budget. But its most unique and useful feature is financial forecasting. With this, can insert a “dummy expense” and see how it’ll affect your finances as far as 30 years into the future. For example, if you want to go on a $3,000 vacation, you can see how much of a hit your money will take a year or two from now from that trip.
This feature is especially helpful for people with a new source of income.It takes a lot of practice to learn what you can afford to buy with each paycheck, and PocketSmith can save you from making some costly mistakes.
Start budgeting with PocketSmith or read our Pocketsmith review.
YNAB
You Need a Budget (YNAB) makes zero-based budgeting not only possible but simple. By linking your bank accounts, the app pulls information about your cash flow to quickly show you how much you have to spend. Then, you “give every dollar a job” each month by allocating all of your money to different spending and expense categories. Throughout the month, YNAB logs your transactions for you to help you stay on track in each budgeting category.
YNAB offers a variety of visuals and resources to help you figure out what you’re doing as you’re doing it. If you’re budgeting (or even just making money) for the first time and want to start out on the right foot, this tool is for you.
Start budgeting with YNAB or read our YNAB review.
4. Start Building Good Credit
You’ve probably heard a used car commercial say: good credit, bad credit, no credit, no problem! So what exactly is “credit,” why is it important, and how can you build it?
Your credit score is a three-digit number between 300 and 850 automatically assigned to you and updated regularly by the big three credit bureaus: Equifax, Experian, and TransUnion. Each bureau will have a slightly different score for you, but they’ll be roughly the same. Your score essentially tells financial institutions how reliable you are and how likely you are to actually pay your debt.
Having good credit throughout your 20s and 30s pays off big time. For example, if you take out a $25k auto loan with a credit score of 750 instead of 650, you could end up paying ~$6,000 less in interest over 60 months.
Thankfully, building credit is pretty simple if you’re consistent.
Here are the two main things you can do to build good credit:
Spend less than 30% of your credit limit each month on your card – this is called your credit utilization ratio and it says a lot to lenders about how responsible you are
Pay your balance in full and on time – set up automatic payments to avoid missing due dates
Related: How To Build Credit the Right Way
5. Open a Retirement Account
Is it ever too early to think about retirement? Nope! In fact, opening a retirement account as soon as you get your first job is one of the best decisions you can make.
A retirement account is a specialized savings account that you add to while you’re working and withdraw from when you retire.
The sooner you open a retirement account, the longer your money has to mature and earn interest (and interest on that interest).
How much interest you earn depends on the type of retirement account you open. The two most common types of retirement accounts are 401(k)s and IRAs.
The main difference between a 401(k) and an IRA is that your employer opens a 401(k) on your behalf but you open an IRA yourself. Some employers will match your 401(k) contributions up to a certain percentage each year. 401(k)s are common for full-time employees on payroll and IRAs are more common among self-employed folks.
If your employer doesn’t offer 401(k) options, you can open an IRA yourself pretty easily.
So after you open an account, now what? Your bank can manage your retirement accounts for you or you can hire a third-party advisor to take over.
There are a lot of ways to go about getting help managing and optimizing your retirement accounts, but one of the best options for beginners is a robo-advisor.
A robo-advisor is an automated platform that uses an algorithm to help advise your investments. Blooom and Betterment are two of our favorites.
Related: How To Figure Out What Retirement Account To Open First
Blooom
Like other “robo-advisers,” blooom uses AI to optimize your retirement accounts.
To get started, you give blooom information about how much risk you’re willing to take with your investments and when you hope to retire. Maybe retirement is the last thing on your mind now that you’ve started a new job, but it shouldn’t be.
With blooom, there’s no pressure to know what you’re doing with your retirement accounts. The platform will make recommendations to make your 401(k) or IRA more profitable, rebalance your investments, and save more by avoiding hidden fees. They’ll even suggest an investment strategy for you and help you set goals.
Blooom can help manage both employee-sponsored 401(k)sand Roth IRAs at an incredibly low rate.
Start investing with blooom or read our blooom review.
Betterment
Betterment is another great choice. This robo-advisor can help you pick the right retirement accounts for your needs from a list of options. If your go-to retirement account is an IRA, Betterment can help you choose between traditional IRAs, Roth IRAs, and SEP IRAs.
To get started, all you’ll need to do is answer a few questions, and Betterment will build and manage an investment portfolio for you that aligns with your retirement goals. Then, they’ll handle rebalancing and managing your investments too according to your goals. Plus, Betterment offers tax-smart tools to help ensure your investments are always working efficiently.
Start investing with Betterment or read our Betterment review.
6. Sign Up for Health Insurance
Most medium- to large-sized employers offer health insurance and automatically deduct your premiums from your paycheck. Sometimes your company’s health insurance is optional and sometimes it’s required. Usually, you can save when you get health insurance through your work because employers can negotiate better benefits and premiums from providers.
Once you opt in, you’ll receive a benefits package detailing everything your insurance covers. Take the time to read through this carefully because understanding the benefits and perks of your plan can seriously pay off.
For example, one common perk of employer-sponsored health insurance is free or subsidized gym memberships, which can save you hundreds annually. You might also be able to save on everyday health items you buy anyway.
Choosing Health Insurance
If your employer doesn’t offer health insurance benefits, you’ll probably want to get some health insurance on your own to protect yourself from medical debt. Policygenius can help you choose the right provider for you.
Policygenius aggregates insurance quotes for any type of insurance you may need, ranging from auto insurance to life insurance to pet insurance. Basically, it does the hard work of comparison shopping for you.
The site saves you time and money by showing you only the best health insurance offers based on your answers to a few basic questions about what you’re looking for. Your privacy is protected and your personal details are not shared with any companies until you sign up.
Get insurance through Policygenius or read our Policygenius review.
Related: How To Pick a Health Insurance Plan
Summary
Becoming happy and well-off isn’t a matter of making money, but managing it. Making these six smart money moves when you get your first job shouldn’t take you more than a few hours and a few hundred bucks, and will accelerate you on your path to financial freedom.
Focus on doing these things – and doing them right – soon after you get that first paycheck.
On my first day of college, I chose a checking account because the bank was handing out free Frisbees. This was my only bank account for nearly 20 years.
Eventually I opened a savings account at the local credit union. Then I discovered the benefits of a high-yield savings account. Last autumn I opened my first certificate of deposit. And just a few months ago, I started a money market account.
Why so many accounts? To me, each bank account serves a specific purpose. Not every account is suitable for every need. Though not everyone needs (or wants) as many bank accounts as I now have, it’s still a good idea to make sure you’re using the right tool for the job.
Here are my four favorite types of bank accounts for personal use — and what they’re good for:
Rewards checking accounts Many small community banks and credit unions around the United States offer a special “rewards” checking account, a product administered by a company called Kasasa. These accounts carry restrictions and requirements (you have to make 10-12 debit purchases each month, the rate only applies to the first $30,000 or so in your account, etc.), but if you meet them, it’s tough to beat the returns.
I tried to maintain a rewards checking account at a local credit union, but ultimately it didn’t work for me. The credit union was too far away, and I wasn’t meeting the transaction requirements.
Here’s a huge list of rewards checking accounts by state. There are still checking accounts that offer 6%!
A rewards checking account is a great option for your main checking account, provided you have a nearby branch and you have a lot of monthly debit transactions. (ING Direct offers a checking account, but it’s not nearly as good as a rewards checking account.)
[Read more: Making the most of your checking account]
Online high-yield savings accounts Like most personal finance bloggers, I’m a fan of online high-yield savings accounts. While traditional banks and credit unions are offering a pittance on their accounts (my credit union’s “high-yield” account is at 0.10%!), you can still find rates above 1.50% through online accounts at CIT Bank, Ally Bank, and others.
I’ve used my online savings account at ING Direct for two primary purposes:
An emergency fund — When I first started my emergency fund, it was important to me that it be a little difficult to access. An online savings account was perfect because I can’t just decide on a whim to spend $10,000. If I want the money, I have to wait a couple of days for it to transfer to my main account. Perfect for an emergency fund.
Online high-yield savings accounts are a great way to save. Interest rates are low right now, but as the economy continues to improve, yields will rise.
[Read more: Which online high-yield savings account is best?]
Money market accounts As an alternate to an online high-yield savings account, consider a money market account from a brick-and-mortar institution. Until recently, my credit union offered an account with interest rates that were competitive with ING Direct. Now, however, they’ve dropped to under 1.00%.
Money market accounts require higher minimum balances than savings accounts. My credit union requires a $10,000 minimum deposit on a money market account, for example. Their minimum deposit for a savings account is $5. Some money market accounts allow limited check-writing privileges. They often limit the number of withdrawals per month.
A money market account can be a great choice if you’re attempting to consolidate all of your accounts at one bank, or if you’re wary of using an online bank.
[Read more: An introduction to money market accounts]
Certificates of deposit Certificates of deposit (often simply called CDs) are time deposits. You give your money to the bank and then promise not to touch it for a specific length of time. In general, the longer you agree to let the bank keep your money, the higher the interest rate you’ll receive.
Unlike a savings account, once you put your money into a CD, the interest rate does not fluctuate. If you open a 6-month CD at 3.50% and interest rates drop, you earn 3.50% the entire six months.
If certificates of deposit offer higher returns than a savings account, then why doesn’t everybody use them? The primary drawback to CDs is that they’re less liquid than a savings account; you can’t just move money in and out of them without penalty. You can take your money out of a CD before it “matures”, but you’re docked interest when you do. In fact, many (most?) banks penalize the interest amount, even if it isn’t earned (meaning you could lose part of your principal if you close your CD early).
Despite these limitations, CDs are great place to put money you don’t expect to need for a while. For most folks, a CD ladder is a good way to maximize returns.
[Read more: Put your savings on steroids with certificates of deposit and Current CD rates]
Peer Lending
If banks are not the right fit for you, there are other services out there such as peer lending. Peer lending services, such as Lending Club match people looking for a personal loan with people who are willing to fund it. Lending Club isn’t FDIC insured, but offers rates between 7%-9%, which are significantly higher than banks.
Choosing an account Each of these four types of accounts can be put to use to build your wealth. (And, of course, you’ll probably want a brokerage account for your Roth IRA and other investments.) As you look to choose an account, be sure to answer the following questions:
What do you need the account for? Long-term savings? Business? Personal? Every-day use?
How much will you keep in the account? Some accounts have minimum deposits in order to get the best interest rate. For example, my credit union’s money market account requires a $50,000 deposit in order to get the top rate.
How liquid does the money need to be? If you need quick and easy access, you’re best served by local brick-and-mortar banks. If you don’t mind a small delay, online banks will work. And if you can let your money go for months (or years) at a time, a certificate of deposit might be your best choice.
Do you need easy access to the money? Do you need a lot of ATMs? I tend to think that for day-to-day use, it’s best to have an account with a local brick-and-mortar bank. But for substantial savings, I’ve found it useful to create barriers. If I don’t have easy access to the money — if I have to jump through a few hoops to get it — then I’m less likely to spend it frivolously.
How important is online access?
How important is customer service?
How important is privacy? All banks should meet certain minimum privacy levels. But you give up a little of that if you have a regular bank you use. At my local credit union, for example, I tend to get the same teller quite often. She remembers a couple of past transactions because they were unusual. This doesn’t bother me, but I know it would bother some of my friends. If you need maximum privacy, take this into consideration.
Whichever account you choose, be sure that it’s FDIC insured. (Or, if it’s held at a credit union, that it’s insured through the NCUA.)
Conclusion Ten years ago I had a single bank account. Today I have five, including each of the above. (My fifth bank account is a business account.) Each account serves a purpose.
Picking a bank account is like choosing the right tool for a job. Sure, you can beat a nail into the wall with a screwdriver — if that’s all you have. But you’ll do it a lot faster and with more precision if you use a hammer. The same is true with money. Use the right tool and you’ll get better results.
How many bank accounts do you have? Do you try to keep things simple? Or do you spread your money around many accounts? Any tips or tricks to share with other GRS readers?
Open a BMO Harris Premier™ Account online and get a $500 cash bonus when you have a total of at least $7,500 in qualifying direct deposits within the first 90 days of account opening. Expires 9/15. Conditions Apply.
Most checking accounts don’t pay interest, but a growing number of high-interest checking accounts do. Some offer yields on par with the best high-yield savings accounts, though often with extra hoops to jump through.
Nationwide Advantage Checkingcan’t match the best savings account yields, but it nevertheless provides a reasonable return on your cash when you meet two qualification requirements. If you regularly use your debit card and receive recurring direct deposits each month, you should qualify for the full yield.
That said, Nationwide Advantage Checking has some important downsides to consider before opening an account. Weigh the pros and cons carefully.
What Is Nationwide Advantage Checking?
Nationwide Advantage Checking is a high-yield online checking account that earns up to 0.90% APY in any statement period where you meet the two qualifying criteria:
Receive direct deposits totaling $1,000 or higher each month (good for 0.45% APY)
Make at least 10 in-person debit card transactions, each totaling $3 or more (good for another 0.45% APY)
If you complete one qualifying activity but not the other in a given statement cycle, you earn the posted interest rate for that activity but not the maximum possible yield.
Nationwide Advantage Checking is backed by Axos Bank, one of the biggest online banks in the United States. In addition to potentially paying interest on balances, it has customer-friendly features like no monthly maintenance fee and no ongoing minimum balance.
What Sets Nationwide Advantage Checking Apart?
Nationwide Advantage Checking stands out for several reasons:
Pays interest with qualifying activities. You can earn up to 0.45% APY when you receive qualifying direct deposits and complete at least 10 in-person debit card transactions of $3 or more each.
No maintenance fees. Unlike some high-yield and rewards checking accounts, Nationwide Advantage Checking charges no monthly or annual maintenance fees.
Big ATM network. Nationwide Advantage Checking has more than 80,000 machines in its ATM network, which spans the entire United States. You pay no fees to withdraw cash from these ATMs.
Above-and-beyond security features. On top of standard security features like automatic timeouts and SSL encryption, Nationwide Advantage Checking goes above and beyond with protections like two-factor authentication and complimentary antivirus and malware protection.
Key Features of Nationwide Advantage Checking
Don’t open a Nationwide Advantage Checking without understanding its core features and capabilities, from its fees and minimums to the conditions it places on interest payments.
Account Yield & Requirements
Nationwide Advantage Checking’s maximum yield is 0.90% APY. You must complete both of the following qualification requirements to earn it in any given statement cycle:
Make 10 or more debit card transactions in person, each totaling at least $3
Receive at least $1,000 in qualifying direct deposits, not including transfers between bank accounts
The debit card transaction requirement qualifies you to earn 0.45% APY on your account balance. The direct deposit requirement qualifies you to earn another 0.45% APY.
If you complete only one or the other in a given statement cycle, you earn only the corresponding interest rate. If you complete neither in a given statement cycle, you earn no interest for the period.
Account Fees & Minimums
This account has no monthly or annual maintenance fee and no ongoing minimum balance. There is a $50 minimum required opening deposit.
ATM Access
Nationwide Advantage Checking has more than 80,000 ATMs in its fee-free network. Cash withdrawals are free at all machines in the network, but you may face surcharges if you venture outside it.
Security Features
All bank accounts come with certain standard security features, such as encryption and password protection. Nationwide Advantage Checking goes a bit beyond the typical security lineup with two notable nonstandard features:
Complimentary malware and virus protection for customers
Two-factor authentication, which means your password alone isn’t enough for intruders to gain access to your account
Mobile Features
Nationwide Advantage Checking has a user-friendly mobile app with all the main features of the regular online account dashboard. You can deposit paper checks on your phone, set up recurring and one-time bill payments, and transfer funds to external accounts or other individuals with a few taps.
Deposit Insurance
Nationwide Advantage Checking comes with FDIC insurance on balances up to $250,000. Should Axos Bank (Nationwide’s banking partner) go under, your deposits are guaranteed by the federal government up to this amount.
Pros & Cons
Nationwide Advantage Checking has some clear advantages and a few notable downsides as well.
No maintenance fees or ongoing minimum balance
Better potential yield than most checking accounts
Large ATM network
Must complete qualifying activities to earn interest
Lower yield than the best high-yield checking accounts
No debit card rewards
Pros
Nationwide Advantage Checking is a low-cost, low-balance checking account that has the potential to be at least somewhat rewarding.
No maintenance fees. Nationwide Advantage Checking charges no monthly or annual maintenance fees, so you won’t pay anything out of pocket to keep your account open.
No ongoing minimum balance. Once your account is open, you’re not required to maintain a minimum balance. Some interest checking accounts make you keep hundreds or thousands of dollars in the bank at all times.
Better potential yield than most checking accounts. Nationwide Advantage Checking has a higher yield than most checking accounts. After all, traditional checking accounts pay no interest at all.
Large ATM network. Nationwide (through Axos Bank) has more than 80,000 fee-free ATMs, more than many competing banks.
Above-average security features. Nationwide Advantage Checking has a few nonstandard but welcome security features, such as antivirus protection and two-factor authentication.
Cons
Nationwide Advantage Checking attaches important conditions to interest payments and isn’t among the highest-interest checking accounts on the market in any case.
Must complete two qualifying activities each statement cycle to earn interest. You need to make at least 10 qualifying debit card transactions and receive at least $1,000 in qualifying direct deposits to earn the maximum interest rate in any given statement cycle. While not totally outrageous, these requirements aren’t easy for every user to fulfill.
Maximum yield can’t match the best high-interest checking accounts. It’s nice that Nationwide Advantage Checking yields anything at all. But it’s a far cry from the top high-yield checking accounts, whose yields compete with the top high-yield savings accounts.
No rewards on debit card spending. Nationwide Advantage Checking has no debit card rewards program. If you want to earn rewards on spending, consider a rewards checking account or app like Go2Bank.
How Nationwide Advantage Checking Stacks Up
Nationwide Advantage Checking shares the spotlight with several other interest-bearing checking accounts. Before you apply, see how it compares to another popular option: Quontic Bank High-Interest Checking.
Nationwide Advantage
Quontic High-Interest
Maintenance Fee
$0
$0
Minimum to Open
$50
$100
Minimum Ongoing
$0
$50
Maximum Yield
0.90% APY
1.10% APY
Qualifying Activities?
Yes
Yes
Both Nationwide Advantage Checking and Quontic High-Interest Checking have no maintenance fees and low minimums. Both also require qualifying activities to earn interest, though Quontic is a bit more manageable with just one requirement. Quontic’s maximum interest rate also noses ahead of Nationwide’s, if not by much.
Final Word
Nationwide Advantage Checking uses a two-tiered interest rate to encourage you to make it your main checking account. Neither qualifying activity is a heavy lift if you have a steady, decent-paying job and regularly use your debit card in person. While the maximum interest rate (currently 0.90% APY) can’t match the top interest-bearing checking accounts, it’s way better than nothing.
That’s not to say Nationwide Advantage Checking is the best checking account on the market. For example, you can earn interest at a much higher rate in a Wealthfront Cash Account — without jumping through any hoops — and you can earn rewards on debit card purchases with Go2Bank (among many other rewards checking accounts and apps). Nationwide deserves to be in the conversation, but don’t open an account before seeing what else is out there.
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
The Verdict
Our rating
Nationwide Advantage Checking Review
Nationwide Advantage Checking has a higher yield than most checking accounts, but you have to meet two qualification requirements to earn it. It’s also not as rewarding as some checking accounts with more relaxed qualification requirements (or none at all). But it’s still worth investigating if you’re in the market for a new checking account and appreciate the opportunity to earn a return on your cash.
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.
If you haven’t started your children or teens off with a kids checking account optimized for their needs, you’ll want to help your college student open a checking account before they begin school.
Opening a checking account for your child can teach them about money management and financial responsibility, along with providing them an easy way to make debit card purchases. It’s never too late to get started.
One advantage to helping your young adult open their first student checking account is they have more options than they might have when they were 16 or younger. Students over 18 can open a bank account with few restrictions.
But choosing a student checking account may give them access to higher interest rates and added features and benefits, along with fee-free checking, no monthly maintenance fees, and no minimum deposit to open an account.
12 Best Student Checking Accounts
Not surprisingly, many of the best student checking accounts come from banks that also offer some of the best checking accounts for any age. However, the products below – in most cases – are tailored for young adults from the ages of 18 to 24, with the features this age group desires most, including an intuitive mobile app and low or non-existent minimum deposit requirements.
1. Best for Students under 18: Capital One MONEY Teen
Most of the student bank accounts on our list exclude children under the age of 17 or 18. Capital One MONEY Teen checking is available to children ages 8 and up. It comes with all the benefits and security of a big bank, providing peace-of-mind. This includes access to Capital One branches and Capital One Cafes for in-person service. This account also serves as a great tool to teach your young adult the basics of banking.
Capital One MONEY Teen checking is a joint account with no monthly fee, no overdraft fees, and access to 70,000 ATMs with no fees. Plus, earn 0.10% on all balances, including those in checking.
You can link Capital One MONEY Teen checking to any other bank account through any bank or neobank, making it easy to transfer money to your teen while they are away at college. Plus, you can keep tabs on their spending with their linked account in the Capital One mobile app.
When they graduate, your teen can hold onto their MONEY account or transfer the funds into a top-rated Capital One 360 Checking account of their own.
2. Best for Working Students: Chime
Chime is not a bank. It’s a financial technology company and mobile app backed by Stride Bank, NA, and The Bancorp Bank. Many features make it perfect for working students. First, you can receive your paycheck up to two days earlier than you might at other banks with ACH deposit.
Plus, you can set up automatic transfers to your linked Chime Savings account, helping you to establish good financial habits early on. Simply set up Chime to transfer a percentage of your paycheck into your Savings Account every time you receive a direct deposit.
When you use your debit card for purchases, the “Save When You Spend” program rounds up your purchase and transfers the difference directly into savings. That small change can really add up, whether you’re saving for your first apartment after college, a new car, or your next tuition bill.
For working students looking to build their credit, Chime gives account holders access to a Credit Builder Secured Visa, with no annual fee, no credit check, and no security deposit required. Instead, the credit account is secured by your Chime checking account with monthly direct deposits.
Like many of the best student bank accounts on this list, Chime has no overdraft fee, no monthly service fee, no ATM fee for in-network ATMs, and no minimum balance requirements.
3. Best Account Opening Bonus: Chase College Checking
Chase Bank has been handing out student account opening bonuses like they hand out lollipops at their branches lately. College students ages 17 to 24 can snag a $100 bonus when they open an account online or at a local branch (students age 17 will need to visit a branch). You’ll just need to make 10 qualifying transactions within the first 60 days of opening the student bank account.
What’s a qualifying transaction? Virtually anything, according to the Chase website, including debit card purchases, online bill payments, Chase QuickDeposits, Zelle transfers, and ACH credits. Bank as you normally would, and you should easily earn that $100.
In addition to the generous sign-up bonus, Chase College Checking has no monthly fees for college students for up to five years, access to 16,000 ATMs and 4,700 branches across the U.S., and zero liability protection for unauthorized debit card purchases.
Chase Overdraft Assist covers purchases that exceed your account balance. You’ll pay no overdraft fee if you’re overdrawn by $50 or less at the end of the next business day.
4. Best for Yield: Ally Interest Checking
Ally Bank is the first bank on our list not designed specifically for students, but the vast array of features in this interest bearing checking account makes it ideal for young adults.
Ally Bank offers an APY of 0.25% on checking account balances and 4.00% APY on balances in a linked Ally Bank savings account. Neither account has any monthly fees.
Ally offers several features to help those on a tight budget manage their money. You can organize your money into spending and saving buckets, which can help you see exactly where your money goes each month. Ally will also review your bank accounts and help you find opportunities to save, and shuttle that extra money into your high yield Ally savings account.
Customers who have deposited $100 or more into their Ally checking account, or $250 via direct deposit, gain access to Ally’s CoverDraft service after 30 days. This protection covers up to $100 or $250 in charges that would overwise overdraft your account. Some purchases, including Zelle transfers, or ATM withdrawals, may be declined if they would put your account into overdraft.
Ally has no monthly maintenance fee, no overdraft fees, no ATM fee for in-network ATM transactions and no minimum balance requirement.
5. Best for Referrals to Earn Extra Cash: GO2bank
GO2bank, the digital bank associated with the top financial technology company Green Dot, offers an easy, straightforward money account with overdraft protection up to $200 with eligible direct deposits. The linked savings account pays a high 4.5% APY, with no fees for qualifying customers and no minimum balance requirement.
You can get regular ACH deposits from your job or side gigs up to two days earlier than most traditional banks. If you receive government benefits, such as Social Security, you can receive those deposits up to four days early.
Your GO2bank account will have a monthly service fee that costs $5 per month, unless you have a qualifying direct deposit that month. You will also pay fees for transfers from a linked debit card from another bank or fintech, mobile check deposits, and cash deposits.
If you are the type of person with friends who come to you for advice, you can earn $50 for each friend you refer to GO2bank who signs up with direct deposit. Your friend will also earn $50. You can use this offer for up to 30 friends, yielding $1,500 annually. This makes a GO2bank account great for social media influencers or college students with a large friend group.
6. Best for Full-Service Banking: Bank of America Advantage SafeBalance Banking
Bank of America Advantage checking accounts offer options for people in various stages of their financial life. College students might be best to start out with Bank of America Advantage SafeBalance banking, a straightforward money account with no overdraft fee and no checks.
The account has no monthly fee for students under the age of 25 or customers under the age of 18. Preferred Rewards customers also receive free checking. There is a $25 minimum deposit to open an account.
New Bank of America customers can earn a $100 account opening bonus when they open an account and set up direct deposits of $1,000 or more within 90 days.
7. Best for Comprehensive Money Management: PNC Virtual Wallet Student
Money Magazine named the PNC Virtual Wallet on its best banks for students list three years running. PNC Bank divides this mobile account into three separate accounts for everyday spending, “reserve,” or short-term savings, and “growth” for long-term savings.
The account has no monthly service fee for students for up to six years, along with all the benefits of a regular PNC Virtual Wallet. Additionally, students receive a courtesy refund of your first overdraft fee on your Spend account, one free incoming domestic or international wire transfer per statement period, and free paper statements if you opt in to receive them.
Once six years have passed or you are no longer a student, your account converts into a regular PNC Virtual Wallet, which may have associated monthly fees. Check the PNC website at that time to determine the fees and how you can waive them.
Your PNC Virtual Student Wallet pays a 0.01% APY on money in your Reserve account, and .02% on account balances up to $2,499 in your Growth account, with .03% APY on balances over $2,500. These may not be the best rates available, but the reputation of PNC Bank, along with the money management features in a Virtual Wallet Student account, make this an account worth considering for students just learning to budget.
8. Best for Establishing Savings Habits.: Wells Fargo Clear Access Banking
As one of the Big Four banks in the U.S., Wells Fargo offers a reliable and safe place to store your money, plus access to thousands of branches nationwide.
The Wells Fargo Clear Access banking account is great for teens and college students, since it’s available for account holders ages 13 to 24. Anyone under the age of 18 will need to open their account in a branch and anyone younger than 17 must have an adult aged 18+ as a joint account holder. The account has no monthly maintenance fee for anyone 24 or younger. A $25 minimum opening deposit is required.
Wells Fargo Clear Access banking is a simple, straightforward money account with no checks and personalized service at Wells Fargo branches. There are no overdraft fees with the account, but also no overdraft protection. Transactions that exceed the account or minimum balance amount will be declined, which helps put teens and young adults in charge of their money.
You can link your Clear Access bank account to a Way2Save Savings account and earn a 0.15% APY. You can establish good money habits by setting up automatic savings. Wells Fargo will transfer $1 from your Clear Access account into your checking account each time you use online bill pay or use your debit card for a one-time purchase. You can also transfer as little as $25 per month or $1 per day into your account to see your savings grow even faster.
9. Best for Cash Back: Discover Cashback Debit
The Discover Cashback Debit account may not be marketed to teens and students, by name. But, it’s enticing to anyone looking for a standard checking account with no monthly service fees and 1% cashback on debit card purchases, up to $3,000 per month. It’s highly unlikely for most college students to max out that free money (unless they are putting housing, tuition, and car expenses on their card).
Discover Cashback! debit card offers many of the benefits you’d expect from these top-rated money accounts, including early direct deposit, 60,000+ no-fee ATMs, and overdraft protection from your linked Discover Savings with no fees. Discover charges no fees for insufficient funds, bank checks, regular checks, or expedited delivery of a replacement debit card.
These features make it one of the most convenient accounts you can hold. Plus, you don’t have to worry about “aging out” of the account and facing fees for a non-student bank account. Your Discover Cashback Debit account will be free no matter your age. Link it to a Discover Savings Account to earn 4.0% APY with no minimum deposit required.
10. Best for Unlimited Out-of-Network ATM Fee Reimbursement – Axos Bank Rewards Checking
Another bank account not marketed to students but meeting all their needs is the Axos Bank Rewards Checking account. This account has no monthly fees. It also reimburses ATM fees for out-of-network ATMs nationwide, which is great for students who travel domestically or who don’t have ATMs in their network on campus.
Pay no overdraft fee or non-sufficient funds fees with this account. Best of all, earn an APY of 0.40% on your checking balance if you receive monthly direct deposits of $1,500-plus. Young investors can ramp up their interest rate by 1% with an average daily balance of $2,500 in an Axos Invest Managed Portfolio Account, plus another 1% by holding $2,500 in a self-directed trading account. If you take out a loan through Axos, you can add another 0.60% to your APY.
College students likely won’t regret opening an Axos Bank account to take them through adulthood, especially with options for investing, low mortgage rates, car loans, and more.
Plus, earn a welcome bonus when you open an account and have direct deposits of at least $1,500 within a single calendar month during the first three months of account opening.
11. Best Credit Union: Alliant Credit Union Teen Checking
Alliant Credit Union offers a teen checking account for minors ages 13 to 17. The account is insured up to $250,000 per account holder by the National Credit Union Administration (NCUA). The adult account holder must be an Alliant Credit Union member. But it’s easy to join by depositing $5 into an Alliant Credit Union saving account. Alliant Savings earns an APY of 0.25%.
The teen checking account has no overdraft fees or non-sufficient funds fee. It also has no monthly fees or minimum balance requirements. Account holders gain access to 80,000+ fee free ATMs nationwide plus $20 per month in ATM fee reimbursement for out-of-network ATM use. This is an interest earning checking account which also pays 0.25% APY on all balances as long as you have at least one deposit, via ACH direct deposit, mobile check deposit, or transfer from another bank or credit union, each month.
12. Best for Young Shoppers: Varo Bank
Varo Bank is another account not necessarily marketed to college students but definitely optimized for their needs. The Varo Bank debit card delivers up to 6% cash back, with money deposited into your Varo account as soon as you accrue $5 in rewards.
Like many of the best student accounts on this list, Varo has no monthly fee, no minimum balance requirements, and no overdraft fee. If you need money before payday, you can use Varo Advance, an interest-fee program that allows you to borrow up to $250 and pay it back within 30 days. You will not pay fees to borrow less than $20. Borrowing up to $250 comes with fees that can be as high as $15, depending on the amount of cash advance you need.
Varo Bank uses the Allpoint network of ATMs, with fee free access to 55,000+ ATMs nationwide. Using other bank ATMs could result in charges up to $3 from Varo and fees charged by the other banks, as well.
It pays to open a linked Varo Bank savings to take advantage of a high 3% APY. Account holders with direct deposits equal to $1,000 per month and a positive balance in their Varo checking and savings can earn up to 4% APY.
One of the best things about a Varo account is it can grow with you. You won’t pay additional fees as an adult out of college, so you can keep the same bank account you started with for your entire life if you want.
Methodology: How We Select the Best Student Checking Accounts
To find the best student checking accounts, we evaluated the monthly maintenance fees, ATM fees, minimum deposit requirements, features, benefits, banking services provided, along with customer service and mobile app access at several of the biggest and most well-known banks and credit unions.
ATM Network
Most banks have ATM networks or partner ATM networks of 20,000 or more ATMs nationwide where you can use your debit card with no ATM fees. You might be surprised to learn that even online banks and financial technology companies that are not a bank provide access to thousands of ATMs nationwide through partner programs.
Nationwide availability (physical locations or mobile access)
College students often split time between their college campus and the home where they grew up. Finding a bank with physical locations in the areas they live or an online bank that provides a mobile banking app with fee free mobile banking from anywhere is important.
Fees and minimum requirements
Bank fees no longer have to be a way of life for today’s young adults. We chose financial institutions with no monthly maintenance fees or easy ways to waive maintenance fees.
Benefits such as high APY, cash-back rewards, or other additional perks
Student checking accounts today are more than just “bare bones” places to store your cash. Many student bank accounts offer perks, benefits, and high-yield savings or an interest bearing checking account to provide added value.
Overdraft fees
Cash management mistakes happen, especially when young adults first start learning to budget and manage their finances. Many banks have no overdraft fees and some offer overdraft protection to help out in a pinch.
How to Choose the Best Bank for College Students
We’ve offered 12 solid options to help you choose the best student checking account. Before you open a student bank account, it’s a good idea to think about what you need in your primary checking account and a linked savings.
The list below makes it easy to review your must-haves and nice-to-haves when you choose your first bank account as a college student.
Best student checking account interest rates
If you’re looking to earn interest on your standard checking account, many banks offer this feature. Review annual percentage yield (APY) figures for your top choices.
Remember, a higher savings interest rate might benefit you more, since money in your checking account tends to fluctuate based on paychecks, bills, and expenses. The best checking account may not pay interest, but can save you money in other ways.
Annual Percentage Yield (APY)
Likewise, you can put money in your pocket with an account with linked savings offering a high annual percentage yield (APY).
Mobile Check Deposit
If you get paid via paper checks, you’ll want to find an account with a mobile app that offers mobile check deposit. Find out how fast deposits clear, and if mobile banking services are fee free.
No Monthly Maintenance Fees
Many banks today make it easy to find a free checking account with no maintenance fees. If you have to pay a monthly maintenance fee, find out exactly what you’re getting for your money. Find out if the perks and benefits, such as a cash back debit card or reimbursement of ATM fees make the maintenance fees worthwhile.
Minimum Deposit and Minimum Balance Requirements
When you’re just getting started, cash may be tight. It’s important to find an account with no minimum deposit to open.
Banking Services Provided
Accounts should have customer service online, by phone or in branches, plus an easy-to-use mobile app and a debit card with no ATM fees.
FAQs About Student Checking Accounts
Read what people are asking about the best student checking accounts, including minimum deposit requirements and benefits of a student checking account.
What are the benefits of a student bank account?
A bank account tailored for students gives young adults a head start on their financial future and learning how to manage money. For students who work, they can receive direct deposits in their student account, pay bills online, and send money to friends and family using Zelle.
How to get a student checking account bonus?
Several student checking accounts, including Chase, provide sign-up bonuses. Make sure to read the fine print and complete the requirements, which may include setting up direct deposit or making a minimum opening deposit, to collect the bonus.
Can I open a student checking account without a deposit?
To open a student checking account without a minimum deposit amount, simply look for a bank account, like Varo, that has no minimum opening deposit.
Are there any downsides to opening a student checking account?
When you open a student checking account, you’ll want to make sure you won’t pay monthly maintenance fees. Some student checking accounts convert to a regular account once the student graduates, and there may be fees associated with the regular account.
Is there an age limit on a student checking account?
Most student checking accounts are open to students from the age of 18 to 24 without a joint account holder. Customers under the age of 18 may be able to open an account with a joint owner.
Can minors open student checking accounts?
Accounts like Capital One Money Teen are available to children ages 8 and up with a joint account holder. Some other accounts require students to be 18 or older.
What happens to your student checking account when you graduate?
Many of the student bank accounts on this list won’t change when you graduate college. Others offer the option to convert your account to one of the bank’s regular checking products. A Chase College Checking Account has no monthly fees for your first five years in college, but if you graduate or exceed that time frame, you might pay a $6 monthly maintenance fee unless you meet other requirements.
Open a BMO Harris Premier™ Account online and get a $500 cash bonus when you have a total of at least $7,500 in qualifying direct deposits within the first 90 days of account opening. Expires 9/15. Conditions Apply.
Unless you have hundreds of thousands of dollars (or more) in cash to save or invest, big banks don’t want your money. They won’t tell you that directly, but they make it plain with paltry yields on standard savings accounts and high asset requirements to avoid common banking fees.
Fortunately, high-yield savings accounts abound, mainly at online and community banks that (still) seem to put regular customers first. The Upgrade Premier Savings account is among the best of the bunch, at least if your top priority is getting the most for your money.
Upgrade Premier Savings isn’t perfect, but it’s a big step up from many savings accounts. Get to know its features, capabilities, and pros and cons to decide if it’s right for you.
What Is the Upgrade Premier Savings Account?
The Upgrade Premier Savings account is a high-yield online savings account with no minimum balance to open and no monthly or annual maintenance fees. It has one of the highest savings yields on the market (currently 4.81% APY on balances above $1,000) and FDIC insurance up to $250,000 through Upgrade’s banking partner, Cross River Bank.
You can open and fund an Upgrade Premier Savings account without a corresponding checking account with Upgrade. In addition to its checking account, Upgrade also offers credit cards and personal loans.
What Sets the Upgrade Premier Savings Account Apart?
The Upgrade Premier Savings account stands out for a few reasons, not all of them good:
Very high yield on eligible balances. Upgrade Premier Savings has an industry-leading yield on eligible balances. As long as you can meet the minimum balance requirement, it’s difficult to do better.
No fees or minimums to open or maintain. You can fund your new Upgrade Premier Savings Account in any amount, and there’s no ongoing maintenance fee to worry about.
Minimum balance required to earn interest. You do need to keep at least $1,000 in your account to earn interest on the balance. Otherwise, your interest rate drops to zero on all balances.
Key Features of the Upgrade Premier Savings Account
The Upgrade Premier Savings Account is a basic (if generous) savings account, but it has some features and capabilities worth spelling out in detail.
Account Yield
Upgrade Premier Savings pays 4.81% APY in any statement cycle during which you maintain a balance of $1,000 or more. The interest rate applies to the whole balance, not just the portion above $1,000.
If your balance drops below $1,000 in a statement cycle, you earn no interest on the entire balance for the period. So it’s critical to keep at least $1,000 in your account at all times.
Account Fees & Minimums
This account has no monthly or annual maintenance fees. There’s no minimum to open and fund an account either. But because you earn no interest if your balance drops below $1,000, that’s the effective minimum balance.
Transfer Limits
Upgrade sets inbound and outbound transfer limits on all Premier Savings accounts. The actual limits vary by customer and may depend on your creditworthiness — Upgrade doesn’t explain how they’re set. But they always fall within these ranges:
Between two and seven inbound transfers during any seven-day period
Between $2,000 and $15,000 in total inbound transfer dollar value during any seven-day period, regardless of the number of transfers
Between $2,000 and $15,000 in total outbound transfer dollar value during any seven-day period
There’s no limit on the number of outbound transfers you can make as long as you don’t exceed your allotted dollar value during any seven-day period.
Ownership Type
Upgrade allows only individual account holders. You can’t open a Premier Savings account jointly with a spouse, domestic partner, or anyone else.
Mobile Features
Upgrade has a robust mobile app and mobile banking dashboard that can do anything the regular online dashboard can. However, the Premier Savings account lacks some mobile-friendly features common in other online bank accounts, such as mobile check deposit and person-to-person transfers.
Deposit Insurance
Upgrade Premier Savings offers FDIC insurance through its banking partner, Cross River Bank. Insurance covers balances up to $250,000.
Pros & Cons
Upgrade Premier Savings has some clear advantages and disadvantages. The upsides include no maintenance fees and an excellent yield, while the downsides include a minimum balance to earn interest and limited options to access your funds.
Excellent yield
No minimum balance to open
No maintenance fees
Minimum balance required to earn interest
No ATM card or mobile check deposit
Transfer limits may affect usability
Pros
Upgrade Premier Savings offers one of the best yields in the business and has no maintenance fees or minimums. It’s part of a much larger universe of Upgrade financial products too.
Industry-leading yield. This account’s yield (currently 4.81% APY when you keep a balance of $1,000 or more) is better than the vast majority of competing savings accounts.
No minimum balance to open. You can open this account with any amount of money, though keep the minimum interest-earning balance in mind.
No maintenance fees. Upgrade charges no monthly or annual maintenance fees on this account.
Easy to manage online. Upgrade Premier Savings is a straightforward savings account that’s easy to manage online with the Upgrade online dashboard or mobile app.
Links with a suite of other financial accounts and products from Upgrade. Premier Savings isn’t the main attraction at Upgrade. It got its start as a personal loan and credit line provider and now offers a slew of credit cards alongside those products. It has a generous rewards checking account as well.
Cons
Upgrade Premier Savings falls short on its minimum balance to earn interest, limited withdrawal and deposit options, and money transfer limits.
$1,000 minimum balance to earn interest. You need to keep at least $1,000 in your account to earn interest. If your balance falls below that threshold, you earn no interest for the entire statement period.
No ATM card or mobile check deposit. Electronic transfer is the only way to deposit or withdraw funds into or out of your Upgrade Premier Savings account. This might not be a deal-breaker, but it would be nice to have a mobile check deposit option at least.
Transfer limits could impact your ability to move money. Upgrade’s inbound and outbound transfer limits probably won’t affect your day-to-day money management, but they could come into play if you need to move a lot of money at once — for example, to make a down payment on a new house.
How the Upgrade Premier Savings Account Stacks Up
Before you apply for the Upgrade Premier Savings account, see how it compares to another popular option with a two-tiered interest rate: the Platinum Savings account from CIT Bank.
Upgrade Premier Savings
CIT Bank Platinum Savings
Maximum Yield
4.81% APY
Up to 4.75% APY
Minimum Yield
None
0.25% APY
Minimum Balance
$0
$100
Minimum Interest Balance
$1,000
$5,000
Maintenance Fee
$0
$0
Upgrade Premier Savings has a slightly better maximum yield and a lower balance threshold to earn that yield, so it’s a better fit for most users. CIT Bank Platinum Savings only makes sense if you want to earn at least some interest when your balance is below the high-yield threshold.
Final Word
The Upgrade Premier Savings account is one of the best high-yield savings accounts on the market right now. That’s because it does what you’d expect a high-yield savings account to do: pay an extremely competitive interest rate on eligible balances.
Otherwise, Upgrade Premier Savings isn’t especially notable. And its minimum balance to earn interest is a problem for savers with limited cash. But once you have at least $1,000 to put away, it’s difficult to do better.
The Annual Percentage Yield (“APY”) for the Premier Savings account is variable and may change at any time. There is no minimum balance to open your account, but you will only earn the APY on days when the closing balance of your Premiere Savings account is or exceeds $1,000. On days where the account closing balance drops below $1,000, the APY will be 0%.
There are no account fees, overdraft fees, or transfer fees associated with Premier Savings accounts.
Upgrade is a financial technology company, not a bank. Premier Savings accounts are provided by Cross River Bank, Member FDIC. Upgrade VISA® Debit Cards issued by Cross River Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Personal Loans made by Upgrade’s bank partners. Personal Credit Lines are issued by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. The Upgrade Card is issued by Sutton Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc.
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
The Verdict
Our rating
Upgrade Premier Savings Account
The Upgrade Premier Savings account has a higher yield than the vast majority of high-yield savings accounts. If you can clear the $1,000 minimum balance threshold to earn interest and don’t mind adding and withdrawing funds via electronic transfer, it’s a superior online savings account.
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.