A Parent’s Guide to Student Checking Accounts

One of the most important things parents can teach their children is the concept of money. It’s not something you should wait to teach your kids until they are old enough to work and make their own money, either. It’s something your kids should grow up understanding and recognizing, and it’s something that you should begin to educate them regarding as early as possible. Money is important; it’s not everything, but it’s a lot. Some people will argue that point until they are blue in the face, but the honest truth is that money is important. It’s important because you need it to live. You need it to pay your bills and live. It doesn’t matter if you’re wealthy or just comfortable; if you’re unable to view money responsibly, you’re going to live a tough and sad life. That’s why parents should understand student checking accounts. Your child technically cannot have a student checking account without actually being a student, but he or she needs to understand that this is an important account. And you need to understand that this account is something with which you should also be familiar. So we’ve decided to teach you what you need to know about student checking accounts so that you can help guide your students onto the path of financial success.

Choosing the Right Account

The first thing you have to understand is that your kids need to choose the right account. You might think that all student checking accounts are the same, but they are not. One of the biggest factors to consider is location and proximity as they apply to convenience. Your student needs a checking account at a financial institution near their areas of frequent use. For example, your student is going to have a difficult time making deposits and visiting the ATM of a bank that’s located all the way across town from his or her home, job and classes. But a nearby financial institution is going to make all of the above a lot simpler and more convenient for your student. Convenience might not be the most important thing to consider, but it’s important. Your son or daughter will save money not using foreign ATMs, and that’s an important factor to consider, too.

Understanding Debits and Credits

Your student needs to understand the difference between a debit and a credit, and you can help. If you don’t know the difference, now is a good time to make that distinction. A debit is money that is being removed from your account. This is the money you spend. A credit is money that is given to you, or credited to your account. It’s important that you understand that the balance on your child’s internet or phone banking is very likely not the correct balance available. Sometimes credits take a few hours or overnight to post, and sometimes debits take several days to post. For example, if your student writes a check for $100 and then checks their account later that day, there was not enough time for that check to clear, so the account is off by at least $100. Your child should keep an up-to-date register with all the financial information available on it and mark items that clear as they post to their account.

Understanding Fees

Fees are a very important consideration to make when your student opens a checking account. Your student could incur fees from many things. For example, if your student uses an ATM at a bank or store that is not his or her bank, there will be an additional fee that comes out of their account. If your student uses their card and accidentally goes over their balance by mistake, they will incur a fee – or overdraft payment. There are many different fees associated with these accounts, including fees such as monthly fees for having the account. Additionally, your student might be charged fees if she or she writes more than a certain number of checks or uses their debit card a certain number of times each month. It all depends on the bank and the fine print in the account contract your child signed.

Understanding Payment Methods

One of the most important things your kids need to understand about their account is the payment methods available to them. This is a parent’s guide, and you are probably highly aware of these payment methods, but you might not consider that they could be all new to your kids. For example, they might not know that checks don’t clear right away, or that some checks clear immediately as if they are a debit purchase. Your student might not know that there are some places that don’t accept debit cards or that there are some ATMs that don’t dispense $10 bills. They might not know that it’s less expensive to go into a supermarket and buy a $1 pack of gum with their debit card and get cash back that way than it is to use a foreign ATM to grab quick cash.

Your students might not know, either, that they can schedule payments online and through their bank, or that they can use internet banking for their account purposes. There are so many things your kids don’t know, and it might be helpful for you to take them to the bank and allow an employee to walk them through the process so that they understand what is available to them, how it works and what will happen if they are overdrawn or if their card is stolen or lost. Your student needs to learn how to use a checking account, and that is on you. Your job is to teach your child appropriate financial views and responsibilities, and that involves not allowing their college checking account to be their very first attempt at banking. See about opening a student checking account for your student when he or she is in high school and using it for their job or allowance so they get good practice managing a bank account prior to it becoming a necessary life skill.

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