Dear Olga,
What are the biggest money drains on students' bank accounts and what can they do to reduce costs?
Thank you,
Money Scared Student
Dear Money Scared Student,
What an exciting time! I remember getting my first bank account when I started my first job in high school. The bank closest to my job had a student checking account option and there weren't any fees associated with my account, it seemed like a logical choice.
Before opening a new bank account, make sure to ask about all fees that are associated with the account you're interested in.
If you've never opened an account before or it's been a while since you've opened an account and want to help a student in your life learn money skills here are some fees to watch out for:
Paper statement fee - a monthly fee for generating a paper statement to be sent to you, this typically can be waived if you sign up to receive electronic statements instead. This fee can be anywhere from $1 - $5 per month. You can find a list of paper statement fees here.
ATM fee - this is a per use fee. Most banks will charge you an additional fee to use another bank's ATM to withdraw cash. So it's possible to be charged two ATM fees for one transaction. This can be anywhere from $1 - $3.50 per transaction, so if you're not using your bank's ATM that could be 2 charges for $3.50! You can find a typical ATM fee list here.
Overdraft fee - a fee for spending more than what is available in your account, typically charged per transaction attempted to spend over the balance. These fees can be as high as $39 and can be charged multiple times per day. You can get an idea of what these fees can look like here.
Account maintenance fee - a monthly fee to maintain your bank account. Some banks don't have maintenance fees, others will waive the fee if there is a minimum balance maintained in the account. This can be up to $15 per month, you can find a list of typical maintenance fees here.
This isn't a comprehensive list, there may be other fees that a bank chooses to charge, make sure to ask your bank representative that is assisting you with opening the account. They usually have a fee sheet they can provide you so there are no surprises 😉
If you have a question, I'm happy to hop on a quick call with you. Here's a link to my calendar! 🗓 No pressure to become a client, just a short call to give you a some practical and actionable tips to help you find your path to financial independence.
Good luck!
Olga