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Updated on Thursday, August 20, 2015
For most students, the college experience is like dipping one’s toes into the “real world”. Yes, a student may be living away from home but their parents are probably still helping financially. Before anyone blushes, it’s okay. According to a University of Michigan study, more than 60% of adults between the ages of 19 to 22 still receive financial support from their parents. They receive, on average, $7,500 per year. This includes costs like college tuition, rent, and transportation. This makes it important that parents find an economical, fee-free way to send money to their children.
But remember, college is typically a transition period in which child should begin having more control over their financial lives, which means finding the best checking and savings accounts. Our round up of bank accounts for college students below offer options for parents to send children money without fees, stellar overdraft protection and even foreign ATM reimbursements.
For Parents Sending Money to Students
Bluebird by American Express
You may have seen these blue cards at Walmart checkouts. They’re quite popular. The Bluebird card serves as a prepaid debit card of sorts. It’s free to set it up online. It costs $5 for an in-store Set Up Kit to begin using right away.
It doesn’t cost anything to send or receive money. Parents can load the card in a number of ways. The fastest way is to send money to the card via an electronic bank transfer (yes, there is an app). Simply connect a checking or savings account to the card and begin transferring funds. It’s just like transferring funds from one bank account to another. Funds can also be added at a Walmart checkout register via cash or debit. Finally, parents can also load the card even by sending in a paper check.
A cardholder can request money for free. They can simply send a request for ‘new shoes’ and a parent can simply transfer ‘x’ amount of dollars to cover the cost. It’s pretty simple.
Another unique aspect of this card is you can add Walmart Buck$. These are funds that can only be used at Walmart. The funds cannot be redeemed as cash, cannot be withdrawn at ATMs and cannot be transferred to a bank account. This may stop the hold holder from using the money irresponsibly.
Fees and Fine Print
- No activation fee
- No monthly fee
- No annual fee
- No overdraft fee
No ATM fees when in-network. Out of network ATM transactions are $2.50 each plus any surcharges from the bank that owns the ATM. $2.50 is a pretty high fee.
The information related to Bluebird by American Express has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this offer prior to publication.
Best Bank for Overdraft Protection
This is our pick because Ally Bank offers a unique overdraft protection plan. Simply link an Ally savings account to an Ally Checking account and it’s protected from overdrafts. However, if the savings account balance isn’t sufficient, an overdraft fee of $25 will be charged. The overdraft fee $25 and is charged a maximum of once per day. But that is still low compared with most banks, with the Big 4 Banks all charging over $30 per incident and often four or five incidents per day.
Ally also provides $10 worth of ATM fee reimbursements per monthly statement cycle, which enables you to take out money at out of network ATMs and still get refunded. But what about other fees?
Fees and Fine Print
- No monthly maintenance fees
- Free standard checks
- Free cashier’s checks
- No fee for having a zero balance
- No incoming wire fees (domestic or international)
- Free Allpoint® ATM usage (43,000+ in the US) plus $10 worth of ATM fee reimbursements each month.
Best Bank Account for Free ATM Reimbursements
Charles Schwab High Yield Investor Checking Account
Thinking about studying abroad? The Charles Schwab High Yield Investor Checking account reimburses all ATM fees, even internationally. This account is ideal for traveling students. Even for those not studying abroad, this may be a good option for any travel overseas.
Charles Schwab High Yield Investor Checking Fees
- No ATM fees
- No monthly service fee
- No overdraft protection fee. Although owners must also have a Charles Schwab brokerage account or savings account to link for overdraft protection. Should funds in the overdraft account be insufficient, a $25 fee will be charged for up to 4 incidents daily. This overdraft protection is pretty abysmal when compared with Ally.
If the parent is more comfortable with having physical locations, there are still brick-and-mortar banks, which offer good benefits and low fees. Before committing to a big bank, check the local credit unions. They often offer a better value. Compare the credit unions with the other banks listed in this post. Ask about overdraft protection, overdraft fees, minimum account balance, and monthly maintenance fees. The good thing about a local credit union is the customer service. Don’t be too shy to ask about fees.
The downside to local brick-and-mortar options is the parent may be in one location and the child in another, making it difficult for one party to withdraw or deposit money. However, most credit unions today have good online banking systems. They may not have mobile deposits or an intuitive app but they have what counts. If ease of use is still a concern, look for a big bank with many locations. Fees will likely be higher and interest lower, but convenience is very important for a college student. After all, they need to spend their time studying.
Don’t Be Afraid to Break Your Routine
Technology has really changed the way banking works today and it’s provided an option for fewer fees and easier transactions. Just because you’ve always banked at a certain establishment, doesn’t mean you should stay there – especially if you’re trying to make it cost-efficient and simple to send money to your college-aged children.