Managing Your Money During College Part 1: Choosing a Place to Store Your Money
This article covers the basics of choosing a bank or credit union with which to store your money.
By Ian Whitmore — April 9, 2024
College is a time of change, growth, and learning. Although much of this change is fun and exciting, certain aspects can intimidate. College may be the first time you experience living primarily as an independent adult. Life as an adult can come with many new responsibilities! One of the most important things you will have to manage as you transition into adult life is your finances. Personal finance is a hugely daunting topic for new college students, so let's start with something simple. This article covers the basics of choosing a bank or credit union with which to store your money.
Do You Need to Set Up a Bank Account?
If you have an existing account...
If you have an existing bank or credit union account, you may elect to continue using that account. Remember, many banks and credit unions are local or regional chains that may not have locations near your college. If you have an account at a nationwide bank, you should note that smaller cities and towns may need a physical branch location for your bank. For many people, not living near a branch is not a problem. With the popularity of credit and debit cards, direct and mobile deposit technology, and the ability to complete online loan applications, you can do most of your banking online or through mobile apps.
Think back over the last couple of years. How often did you need to go into your bank's physical location? If you only stopped by a couple of times or never went at all, you should check with your bank to see if you can continue to access all the services you need online. If you find yourself at the bank every month, think about the specific services that you need to utilize. You may still be able to perform most transactions online.
On the other hand, if you need to deposit cash frequently, want access to a safety deposit box, or plan to apply for a more complex type of loan, it is important to have a branch location nearby. Also, some people (such as myself) prefer to do most of their banking face-to-face. If you have an existing account and want or need frequent access to a physical branch, but your bank doesn't have locations near your college, read on to learn more about choosing a bank to use during college!
If you do not have an existing account...
If you do not have a bank account, college is a great time to set one up! If you plan to get a job or earn income while in college, you want to have an account to store your money. It may sound cool to stash your cash under your mattress, but it's not very secure. In addition, some types of accounts pay you interest on the money you keep in them. Banks and credit unions are also helpful for many other things, such as getting foreign currency for international trips, taking out loans, and easily paying your bills. College is also a great time to learn how to write a monthly or weekly budget, which is much easier when you can keep track of your finances through a bank account.
Choosing a Financial Institution
Different Financial Institutions
The two main types of financial institutions are banks and credit unions. There are several differences between these two types of institutions. The main ones include:
- Banks are owned by investors, while credit unions are owned by the members of the credit union.
- Banks operate for-profit, while credit unions are not-for-profit institutions.
- Banks tend to operate with a nationwide or global network. Credit unions tend to be more localized, have lower fees, and offer more personalized service.
Both banks and credit unions typically offer financial services such as checking and savings accounts, loans, and credit cards. Do some research on the bank and credit union options available to you. Most towns and cities feature a variety of local banks and credit unions. Some credit unions even partner with schools to offer special accounts for students!
You must be a member if you want to get an account at a credit union. Check out the membership requirements to make sure you qualify. Many nationwide banks have branches throughout the United States, and you may find them convenient if you don't want to get a new account when you move. Local banks often offer more personalized service and lower fees, while national banks generally offer a wider range of services and more convenient branch locations.
Online-Only Institutions
Historically, almost all banks and credit unions had brick-and-mortar locations called branches where customers went to deposit cash and checks, withdraw money, buy checks, apply for loans, and so on. New technologies have made it possible for most of these services to be completed online or through ATMs. As a result, some banks and credit unions are online-only. These institutions do not have physical locations and offer their services through the internet and/or phone. Some people prefer online-only banking since they like to access all the services they need from anywhere through their phone or computer. If you think online-only banking sounds convenient, research and find an online-only bank that works for you.
Other Considerations
There are thousands of banks and credit unions across the United States. Most of them offer the account types and services you need, but there are a lot of variables. Some banks may charge a monthly fee for an account, while others offer free accounts. Some institutions require a minimum balance to be kept in your account. Different banks offer interest rates for auto, student, and home loans. Make sure to compare the options available to you to make an informed decision. The next article in this series will go over the most common types of bank accounts and what to expect when you walk (or click!) into a financial institution to set up an account.
Ian Whitmore
Ian Whitmore was born and raised in Austin, TX and spent his childhood and teen years immersed in the rich cultural scene of Austin and the beautiful landscapes of the surrounding Hill Country. He graduated from Wyoming Catholic College in 2020 with a B.A. in Liberal Arts.
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