The Basics of a Checking Account

If you’re a new student, going to college may be your first taste of financial freedom.  And while you may have had your own savings account for a while, you’ll probably want to consider getting a checking account to help you manage your day-to-day expenses.  Here are a few important things to consider:


1. Keep your money safe

Putting your money in a bank account is much safer than keeping it in your wallet or in your dorm room, where it could be lost or stolen. You don’t have to worry about the bank losing your money because the Federal Deposit Insurance Corporation (FDIC) insures bank account deposits up to $250,000 per depositor, per institution.


2. Shop around

Since each bank’s policies differ, be sure to compare any prospective institution’s fee schedules and terms and conditions before opening a checking account. The last thing you want to do as a student on a limited budget is pay for services you don’t need or rack up unnecessary fees.


3. Consider a student checking account

Some banks offer accounts specifically designed for students.  Look for an account that has no monthly fee, if possible, and convenient access to ATMs (Automatic Teller Machines).  Some accounts may also offer no overdraft fees or non‑sufficient funds fees and a student recognition program. Lastly, you’ll want an account with a robust mobile app to allow you to keep track of your while on the go.


4. Understand how they work

Checking accounts are fairly easy to use.  You increase the balance in your checking account by depositing cash, paychecks, or other checks such as financial aid refunds. You can then withdraw the money you’ve deposited—by writing checks, using a debit card to make purchases at the point of sale or online, setting up automatic bill payments from the account, or withdrawing cash from an ATM — to pay for everyday expenses such as rent, books, groceries or insurance. Make sure you have enough money in your account before making purchases, paying bills and/or withdrawing cash.


5. Set up direct deposit

If you plan to work while you’re in school, you can save yourself trips to the bank by setting up direct deposit of your paycheck.  Many employers now offer this option, giving you peace of mind knowing that your money will be there when you need it.


6. Keep track of your money

Using a checking account to pay your expenses is an important part of managing your money, as it allows you to keep track of where your money is going and helps you pay your bills on time. Since most banks and credit unions offer online (and in some cases mobile) banking tools, you can now monitor your transactions (which simply means a record of any deposit or withdrawal) anytime.  However, even though the bank keeps track of your account’s transactions, it is important for you to keep your own records, either in a separate check register or by regularly reviewing and confirming those transactions online. In addition, some banks offer features such as mobile alerts that will let you know when money has been deposited or your balance is running low. For more information about managing your checking account, refer to this guide from the federal Consumer Financial Protection Bureau.


7. Review your account every month

Whichever bank you choose, you will be sent a monthly bank statement (unless you opt for a paperless online version) that details all the deposits and withdrawals that have been made to the account during the last month. It is important to review these statements as soon as you receive them and reconcile them with your own records to make sure: (1) the bank did not make a mistake in recording your transactions and (2) you did not make an error or forget about any transactions. If you have any questions about your statement, contact your bank as soon as possible. Taking time each month to review your account provides an important visual reminder of where your money is going and will give you the opportunity to adjust your spending habits going forward so your money will last through the semester or school year.





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  • April Cook

    Direct deposit would be really helpful, especially since I don’t have a car and can’t always get to the bank. I think it is also a good idea to look for a bank that has an app or online access to your account. This is a great way to be able to check your accounts and keep track of your spending.

  • Jeff Carbine

    I know that most of us trust online banking and are a bit cynical about balancing an account. However, we should be reviewing and monitoring our bank accounts, especially checking accounts. Here are two things that I suggest when monitoring checking accounts: Get the mobile/email alerts from the bank for any large purchases on your checking account. Second, you should consistently look over your account online and see if there are any duplicate charges.