Switching from a Student to a Non-Student Bank Account

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Updated on Monday, August 4, 2014

Switching from a Student to a Non-Student Bank Account

This is our first post from our new contributor Kelly Harry. Kelly is joining us from Brooklyn College where she’s majoring in journalism and finance. 

When you’ve completed college, it is in your best interest to change your student bank account into a non-student account. Why you ask? For one, your bank will do it for you, whether you notice or not. And second: loyalty costs.

As a college student, you’re seen as a hot commodity to banks. To entice you they’ll offer exclusive deals, such as free banking during your college years. However, when you graduate, your account will graduate with you, and all those wonderful perks and savings will unfortunately come to an abrupt end.

Once you graduate to a non-student bank account, most banks have minimum deposit amounts, monthly fees (if you fall below that minimum) and expensive overdraft structures. Even worse, you can only use ATMs of that bank, and can pay pesky fees if you use an out-of-network ATM. While they’re trying to sneak money out of your account in fees, they pay almost nothing on your deposits. The typical interest rate on savings accounts is 0.01% at traditional and community banks. So why waste your money on unnecessary fees when you can switch banks and protect your cash?

I know what you’re thinking, and believe it or not, switching isn’t as complex as it seems. Post-graduation life is full of change, and miscellaneous inquiries anyway, so while you’re hunting for that new job, why not shop around for the best “non-student” banking deal.

Here are a few tips on how to avoid costly banking fees:

Never pay a monthly fee

When you first graduate from college, you may be living from paycheck to paycheck, with minimal money in your account. Monthly fees for bank accounts can add up quickly. You should find a bank that has no minimum deposit amount and no monthly fee. A minimum deposit is a set amount of money you must keep in checking or else the bank will slap you with a monthly charge. For Bank of America’s Core Checking Account, you need to either have a qualifying direct deposit of $250 each month or a daily minimum of $1500 in your account. Otherwise, BofA will charge you a maintenance fee of $12. These fees are waived for students, but college grads get the unhappy gift of a “real-world” account. Beware, if you’re searching for a job and don’t have a direct deposit going into your account each month (or a spare $1500 sitting in there each day) you’re going to get charged a monthly fee.

Never pay an overdraft fee

Big banks can charge you a fee per incident when you go overdraft. These fees can high as being $35, per overdraft charge. Those fees can add up quickly, and when you have a low balance in your checking account, it is easy to make a mistake.  You may have signed up for overdraft protection, but many of the big banks still charge a fee to transfer money from your savings account to cover the cost of overdraft. Make sure you choose an account that doesn’t punish your mistakes with massive fees or nonsense charges to move your money.

Make your ATM visits free

Many Internet-only banks offer a free ATM visits at any ATM in the country. In most cases, you’ll be charged initially, but your bank will reimburse you for the fee.

Returned deposit fee

If you deposit a check that bounces, some banks charge a fee. Big banks can charge up to $15 for returned deposit items, and $25 for an internationally returned deposit item. However, small banks and credit unions don’t. Hopefully you won’t encounter any bounced checks, but it’s better to be safe than sorry.

Lost debit card fee

If you misplaced your debit card, it’ll cost you up to $7.50 to replace. If you need it replaced ASAP, then it’ll cost you up to a hefty $25 expedited delivery fee for a new shiny piece of plastic. To lessen the blow, you don’t have to request expedited delivery on your new card—you can simply use cash you have on hand or your credit card for payments until the new debit card arrives.

Paper statement fee

Banks charge customers $2 a month for paper statements. To avoid this fee, search for a bank that waives this fee or look into an account that enables you to bank entirely electronically.

Returned mail fee

When you move, a mail-forwarding request with your post office may not be good enough for your bank. Many banks print “return service requested” on their envelopes, so your mail gets sent back to the bank if it can’t be delivered, upon which, a number of banks charge a fee. These fees can add up, so make sure you update your address with your bank upon moving.

Human teller fee

Some banks charge a fee for using a person to handle transactions. If you’d like the ability to consult a teller, seek out bank accounts that don’t levy this charge.

How to eliminate those fees

Don’t limit your banking options to banks with branches. Internet-only banks, like Ally, Axos Bank and Charles Schwab’s online banking, don’t have monthly maintenance fees, ATM fees and offer higher interest rates. Credit unions also tend to offer fewer, and cheaper, fees than traditional banks.

In fact, if you’re interested in opening a savings account, credit unions and Internet-only banks often pay higher interest rates on savings accounts in opposed to brick-and-mortar banks. Luckily, you don’t have to do all of the work when searching for a fee-free checking account with perks because Magnify Money’s got you covered. Just fill out the simple tool here.

Now that you’re aware of these fees, you can take necessary steps to avoid the ones that may put a strain on your finances. After all, as a new graduate, these pesky fees should be the last of your worries.  When all else fails, just keep in mind, you’re not obligated to stay with your current bank. If you’re not too fond of the features they offer, revisit, it’s that easy. Chances are, you’ll find another convenient institution where you can bank without being charged any fees.

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