5 Accounts Every College Student Needs – and They’re Not What You Think
Written by
Laura Bogart
Edited by
Kristen Mae
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Everything you learn in college doesn’t have to come from books. There’s a whole world of experiences to have and friends to make while earning your degree, all formative in shaping you as a person — some more positive than others. These experiences can indelibly shape your views of money and help guide your financial future.
If those experiences helped to shape a financial future where you got a little slap-happy with a credit card and ended up in debt — or perhaps didn’t learn to save effectively — it makes sense that you’d want the college student in your life to do better. And there’s no better hands-on learning than managing your own bank accounts.
While some accounts, like a first checking account, are expected among college students, there are a number of other accounts that can set your future graduate up for success — and some of them might not be what you think.
High-Yield Savings Account
By getting your college student to enroll in a high-yield savings account (HYSA), you’re teaching them the value not only of saving, but also finding ways to make their money work for them. Funneling some money from a part-time job, full-time summer job, or paid internship into an HYSA allows them to see their money grow in interest over time.
They can use their HYSA to get acquainted with having an emergency fund or even create a second HYSA to cover the cost of their books. Learning how to set up an HYSA and automate regular payments to it could be a foundation for good banking practices.
Roth IRA
Okay, the idea of setting a college kid up with an account traditionally associated with people well established in their full-time careers may seem odd. But is it really? Not only does it get your college student thinking about saving for retirement at a time when many of their peers are more focused on getting into an elite frat or sorority, it also sets them up for a healthy retirement down the line. Thanks to compound interest, even small contributions now can lead to big returns.
Credit Cards With Student Perks
While giving a college student a credit card seems like a double-edged sword — with both sides out to cut you as deeply as they can — a credit card with a low limit, specifically designed to help students stay out of trouble, can help young people build a credit history responsibly. At the same time, they’ll benefit from perks like cash back or discounts on things associated with school and student life.
Cash Management Account
For college students who need to learn firsthand about saving wisely and spending strategically, these accounts offer the very best of checking and savings accounts through their higher interest rates, fee-free withdrawals, and easy access to funds. These accounts let young people send and receive money through popular wallet apps like Zelle, Venmo, Cash App, Apple Pay, Google Pay, and PayPal.
Student Checking Account
With no monthly maintenance fees as well as low minimum balance requirements, checking accounts specifically geared toward students can help them learn how to manage their everyday expenses without going to the school of hard knocks. Look for accounts that also have school and student life-related perks.
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