Many college students are banking on their own for the very first time. They are choosing to put their money into these huge banks who charge you ridiculous fees for their own benefit.
These banks take money out of your account, because you don’t have enough money in your account. How ridiculous is that? Even though some of these big banks have student accounts, you will still get charged fees the day that you graduate from college. You might as well start banking with somebody who treats you right.
They charge you fees for transferring money out of your savings account too many times in a month. Who wants to pay to use their own money?
Other fees that many banks have include foreign transaction fees, dormant fees, ATM fees, overdraft fees and many others! So what banks don’t have all of these ridiculous fees?
What is a Checking Account?
A checking account is an account offered by most banks and credit unions that allow you to store your money. You put your money into a checking account and get a debit card that is linked to the account. The debit card allows you to spend the money that you put into the account.
Credit Unions are usually a great way to avoid all of these crazy fees. They are usually smaller than regular banks, have fewer fees, have better interest rates, and are more friendly than the larger banks
What is a Credit Union?
The easiest way to understand a credit union is to think of companies like Costco, Sam’s Club, or BJ’s. Even though you have to be in a specific group (whether it is living in a certain area, belonging to a certain organization, or going to school at a certain place you end up saving money in the long run because of the decreased number of fees and increased interest rates.
Credit unions such as Suncoast Credit Union, UW Credit Union, and Redwood Credit Union are some options for people in their respective locations. Look for a credit union near you by checking out this website.
Sofi is an online bank that has no fees at all! There are no minimum balances, no ATM fees, 20% off Lyft rides, no foreign transaction fees, etc. As of 1/27/20, they have interest rates of 1.6% on your checking and savings. This is much better than most banks who might offer 0.1% (if you are lucky). You can check out Sofi Money by clicking here.
Sofi is also awesome, because they have financial planners who will help you with your money for free. They can help answer any questions that you have and tell you exactly what the best course of action is. Lastly, Sofi offers community events! They host events where you can meet other Sofi members at dinner or at other locations in your area.
All of these things that Sofi Money offers are the reasons that I personally use Sofi Money and believe it is a great bank. The only down-side to Sofi Money is that it can take a couple of days to transfer money into and out of the account which can be a pain sometimes. I do believe that the benefits largely outweigh the negatives, which is exactly why I have my own account.
Ally is another online bank that has no fees! They offer 1.6% savings accounts (as of 1/27/20), no minimum balance or maintenance fees, as well as some of the best financial books to help you learn about money.
Ally Bank is a great way to get out of paying all those ridiculous fees that the large banks charge. There is no reason to not at least check out Ally by clicking here. You can get free wire transfers, copies of your online statements, and much more!
The only negative of banking with Ally Bank is that you cannot deposit cash into your account. I suggest that anytime you are using an online bank, that you also use a brick-and-mortar bank or credit union. This will ensure that you do not have any issues depositing cash.
Banking with CapitalOne 360 is a great experience. You can bank with them without any minimum balance or maintenance fees. They offer a free, award-winning mobile app where you can deposit checks and move your money throughout your account.
CapitalOne 360 offers free “CapitalOne Cafes”, which they believe are the future of banking. CapitalOne Cafes are a gathering place for all of their members. CaptialOne members are able to get some food, sit down with other members, and get banking advice from the CapitalOne 360 tellers.
The commonality between CapitalOne 360 and Sofi is that they both offer the opportunity to meet other members, in addition to not charging many fees.
CapitalOne 360 also offers the opportunity to talk to a teller face-to-face, which is something that I suggest. As I mentioned above, online banks are great but sometimes the brick-and-mortar branches are more convenient. CaptialOne 360 is a great option!
BBVA is a bank that has only one fee. They are a little bit different than the ones I mentioned above, because they require an $25 initial deposit.
There are no monthly service fees or minimum balances with BBVA, and there are over 1,000 ATMs in Texas alone. Learn more about BBVA by clicking here. They have great online savings, checking, and premium checking accounts that you can look at.
There are many local banks that offer no monthly maintenance or service fees. These banks usually are much smaller, but offer great interest rates on your savings accounts and very few fees. While not all local banks are fee-free, many are.
These local banks also offer you the opportunity to support your local businesses and meet people from your area. You never know what good offers you will find when checking out your local banks!
How to Switch Bank Accounts
If you are asking how to switch bank accounts it is super easy! Go to the bank that you currently banking with and say you want to close your account. They may give you a little bit of push back but just insist that you close your account. They will close the account and most likely give you a check for the money that was in there. You would then open your new bank or credit union account and cash the check! That is how you switch bank accounts.
What do I need to Open a Bank Account?
To open a bank account in most banks or credit unions, you just need your social security number, name, phone number, address, and a pin number that you want to use. Opening a bank account can take 5 minutes or less!
Before signing up for any account, check to see if they are offering any promotions that will allow you to get money for signing up! Most of the time when they make these offers, they require that you meet certain requirements so always check this!
To Sum It Up…
Stay away from the large banks that charge fees just for storing your money there. There are so many other options of banks that work just as well, if not better than these large banks. Check out your local credit unions and banks, Sofi, Ally, CaptialOne 360, and BBVA. They are all great options for you to save that money!
**All of the information that I mentioned above is as of 1/27/20. Fees and interest rates change overtime so always check before signing up for any accounts.