Enrolling in college is a major life event. Aside from academic pursuits, college also provides an opportunity for students to develop the independence they need to succeed in the “real world.” Financial independence is a key skill to develop in college. Opening an account at a bank or credit union is one of the best ways for college students to learn essential financial skills.
While having a bank or credit union account is important, many students and parents may have questions about how to select the right one for their needs. Below, we’ll rate the best banks and credit unions for college students.
College students need bank or credit union accounts for a variety of reasons.
First, bank accounts can indirectly influence a student’s credit score. Second, bank accounts enable students who work to take advantage of direct deposit. Third, most bank accounts issue debit cards, which can be used at online and brick-and-mortar retailers.
For all these reasons and more, a checking account is a wise choice for any student.
Banks and credit unions have a lot in common. Both provide checking and savings accounts and may offer loans to account holders. Funds in both types of institutions are insured. However, there are three key differences.
The first difference is that pretty much anyone who meets the minimum requirements to open a checking or savings account at a bank will be allowed to do so. However, some credit unions will only open accounts for members. Credit unions usually limit membership to those who work in a particular industry or for a certain employer or live in a certain geographical area.
The second difference is the business structure. Banks are for-profit companies, while credit unions are nonprofit. This structural difference is tied to the third and final difference, which is the amount the institution pays you in interest or charges you to maintain the account. Although banks are usually larger, their fees tend to be higher than credit unions. Similarly, dividends – the amount earned on certain accounts – tend to be higher at credit unions.
To develop this list, we considered all banks with a national presence in the United States. Regional banks were, therefore, not included in the analysis. Online banks were also considered. Credit unions that restrict membership to employees of certain industries or companies were not included, but credit unions with open membership to the general public were considered.
Because we assume that students will be interested in a checking account primarily, the focus will be on the types of checking accounts offered by each financial institution.
The following criteria were used to evaluate each financial institution:
The banks and credit unions are presented in alphabetical order.
About: Alliant is an online credit union open to customers across the nation. Membership is available to: 1) those in the Chicago area; 2) employees of certain organizations; and 3) family members of current clients. Those who do not meet these criteria can join Alliant by joining Foster Care to Success (FC2S). FC2S serves foster teens across the U.S. by providing them with educational grants and scholarships, care packages, mentoring, and internships. (Alliant will pay a $5 membership fee to FC2S on your behalf.)
About: Ally is an online bank that aims to help customers and promote social good. Although Ally was founded over 100 years ago, it now focuses exclusively on digital banking and services.
About: As the nation’s second-largest bank, Bank of America operates in nearly every state and offers in-person, online, mobile, and telephone banking services. While Bank of America charges a considerable amount for some accounts, its policies for college students have several attractive features.
About: Capital One, which is best known as a credit card company, also provides banking services. While the Capital One 360 account emphasizes online and mobile banking, there are also physical buildings – Capital One Cafes – where customers can go for banking assistance.
About: As one of the nation’s oldest banks, Chase provides a multitude of services. The bank offers everything from savings and checking accounts to loans and mortgages. As a nationally established bank, Chase operates ATMs and branches in most states.
About: In 1983, two banks – Pittsburgh National Corporation and Provident National Corporation – decided to merge. Luckily enough, the banks shared the same initials, so the new entity was called PNC Bank. Today, PNC operates in 37 states.
About: Like many of the banks on this list, U.S. Bank has been around since the 1800s. Today, the bank has established itself as a leader in both physical and electronic banking.
All of the banks or credit unions discussed above are great options for students. In the end, the answer to which financial institution is best depends on a number of factors including cost, convenience, and cash access. Before making a final decision, contact or visit several banks to evaluate their services.
If you have other questions, College Finance is here to help. The team at College Finance takes pride in providing college students with clear and accurate information about financing their education goals. Turn to College Finance whenever you have questions about planning, borrowing, and paying for college.