When you head off to college, you may have more to worry about than making it to class on time. In many cases, college is the first time young adults are responsible for managing their own finances, and the task often comes with a steep learning curve. The good news is that a checking account can help ease you into this new chapter.
Here are four ways a checking account can help college students effectively manage their money:
- Keep your money safe. Keeping your money in a checking account is much safer than stashing cash in your dorm room. When your money is in a checking account it’s protected against fraud, and as long as you’re banking at an insured financial institution, your funds are safe in the event of a bank failure as well. Most banks and credit unions insure up to $250,000 per accountholder through the FDIC or NCUA, but some banks provide their customers with additional coverage as well.
- Easily access your funds. When you open a checking account you will typically get a debit card which allows you to get the cash you need through an ATM. A debit card also allows you to make purchases online or in-person, just like you would with a credit card. While there are key differences between debit cards and credit cards (namely that you’re borrowing money when using a credit card, and spending money from your bank account when using a debit card), both can provide a convenient way to make purchases. Many debit cards are also compatible with mobile wallets such as Apple Pay and Google Pay. A checking account also typically comes with paper checks. While paying by check isn’t quite as popular as it once was, checks can still come in handy for certain payments like rent or utility bills.
- Keep tabs on your finances. With a checking account, you can easily keep track of how much money you have coming in and going out. Gone are the days of having to record every deposit and withdrawal in a checkbook ledger. Today, virtually every bank offers online banking and mobile banking, where all of your bank account transactions are logged for you in real-time. This not only allows you to stay on top of your account balance, helping you to avoid costly overdrafts, but it also allows you to more effectively budget and spot fraudulent transactions or bank errors. Many online banking platforms and mobile banking apps also feature robust money management tools that can help you better understand your spending patterns so you can cut down on frivolous expenses and save more money.
- Earn money. Believe it or not, some checking accounts allow you to earn money. While interest-bearing checking accounts aren’t the norm, they are becoming increasingly common, especially among online banks. Like a savings account, these checking accounts pay interest on your available balance. And while most brick-and-mortar banks have dismally low interest rates, many online banks, like Bank5 Connect, offer very competitive rates on their checking and savings accounts. Depending on which checking account you choose, you could also potentially earn additional money by using your debit card, as some debit cards offer cash back rewards.
Managing your finances on your own for the first time can be intimidating, but the right checking account can make it a piece of cake. If you’re interested in learning more about the benefits of a Bank5 Connect high interest checking account, visit bank5connect.com/checking today.