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Student Banking: Getting started

Getting your first bank account doesn’t have to be scary. This guide will walk you through the process of picking out the bank or credit union that’s right for you, setting up an account, and signing up for direct deposit, so you have immediate access to any student loan money you may receive in college.

In this guide you will learn how to:

Why should you open a bank account?

A bank can help you access funds from your student loans faster and manage your money electronically, similar to using a mobile app to send money to your roommate. Signing up for a bank account now can save you headaches later. However, you do not have to have a bank account to access your student loan money. Besides a bank account, you can get a card from your school that might also double as your student ID, a check, or cash. But be aware, student ID cards may not be accepted everywhere, and cashing a check without a bank account could cost you.

Choose a bank account that’s right for you

Consider your options

Banking options include traditional banks and credit unions that might have locations on or near campus and offer services like checking and savings account, as well as virtual or online-only banks that usually do not have in-person locations but may offer checking accounts that let you use ATMs owned by other banks to withdraw cash.

Start by looking at banks and credit unions on or near campus. Often the student handbook or new student welcome guide will have a list you can use to start your search. You can also ask for recommendations from other students. It may be more convenient if one of the banks you are considering also has a branch near where you plan to live when you aren’t attending school.

Don't feel limited to only the banks or credit unions that have ATMs on or near campus. Some online-only banks will automatically reimburse fees for using any ATM, even if it isn’t affiliated with that bank, or allow you to withdraw money at familiar stores. As long as the account has a routing and account number (most do), you will be able to use it with your student aid account.

Call or go online to ask some questions

Before you sign up for an account, call or go online to ask about the fees they charge and how you can avoid them. Many banks have accounts designed specifically for the needs of students and many waive some fees while you are in school.

Questions to consider:

  • What fees does the bank charge?
    • Find out how much you must always keep in the account to avoid or reduce fees. This is called the “minimum balance requirement.” This may not be the same amount of money you need to open the account.
    • Banks and credit unions often charge fees for services like overdraft, where your bank or credit union lets you make a debit card purchase or ATM withdrawal even if you don’t have enough money in your account to cover it. Your bank or credit union cannot charge you fees for overdrafts unless you have agreed (“opted in”) to these fees. So, if you’re worried about overdraft fees, you can avoid them by not opting in, or by opting out if you are currently opted in. Note that if you don’t opt-in to overdraft, transactions greater than your balance could be denied.
  • Do checks come free with this account?
    • You might not need checks often, but sometimes checks are required to rent an apartment or set up direct deposit.
  • Are there fee-free ATMs close to my home or school?
    • Generally, you can avoid ATM fees by using your own bank or credit union’s ATMs because most banks and credit unions don't charge a fee for this service. However, not every ATM with your bank’s logo on it can be used without a fee, some may still charge a fee to check your balance or withdraw cash.
    • Usually, when you use another bank or credit union’s ATM, both the operator of the ATM and your bank or credit union charge you a fee.
    • Some banks and credit unions offer to rebate ATM fees. Check with your bank or credit union to find out what ATMs you can use without an additional fee.
  • Do you have any free online or mobile apps to manage my account outside of a bank branch? Is online bill pay included?
  • Does this account work with contactless phone payment apps?

For more questions you can ask, download the Opening a checking or savings account checklist.

Open a bank account

Once you have decided on which bank is right for you, it is time to open an account. Opening an account can take anywhere from a few minutes to an hour, so plan your time so you aren’t rushed.

Before you go

Gather the documents you will need to bring with you. The following items are most common, but before heading to the bank or credit union or applying to a virtual bank online, be sure to check their website for any additional items they may need.

  • Two forms of identification:
    • The first form of identification must be a U.S. driver’s license or passport. Some banks and credit unions accept foreign passports and Consular IDs, such as the Matricula Consular card.
    • The second form of identification can be a Social Security card, your birth certificate, or a bill with your name and address on it.
  • Money to deposit
    • You may also need to bring some money in cash, perhaps $25 to $100, to deposit into the new account.

Download the Checklist

What to expect at a traditional bank or credit union

When you arrive, let the bank representative know you would like to open an account. Often an employee at the bank will sit with you and help you fill out any paperwork and answer any questions you might have. They will also ask you for personal information such as your name, date of birth, your mailing address, phone number, and email address, so the bank can communicate with you. The agent at the bank may ask for this information in writing or using a digital device like a computer or tablet.

The employee at the bank may ask for the money you brought to deposit. Keep in mind that some accounts have a minimum deposit requirement.

Some banks may be able to create your debit card during your visit, while others will mail them to your address. Debit cards are used to withdraw cash at ATMs and to pay for items in stores that accept cards with the network logo printed on the card, such as Visa or Mastercard. Some banks also offer temporary checks to use while you wait for your debit card or permanent checks.

What to expect at an online-only bank

Online-only banks don’t require you to visit in person to open a spending, checking, or debit card account. However, online banks still require you to provide the same information as traditional banks, like photos or scanned copies of your identification documents, and may require you to provide your mailing address, phone number, and email address. For email and phone, the bank may ask that you demonstrate you can access it by clicking on a link they will send you.

Once you open the online account, you need to put money into it. If you don’t have an existing bank account to transfer funds from, you’ll have to find another way, such as visiting a local branch or partner store to deposit cash. Online-only banks may mail you a physical debit card like a traditional bank or may only offer a virtual card that can be used exclusively online or along with a tap-to-pay phone application in stores that accept contactless payments.

After you leave

When you receive your card in the mail, read the instructions carefully. You may need to dial a number to activate the card or set up your pin, a private number you will need to take out your money at an ATM.

Once you have your checking account, you need to manage it i to keep it. Good account management helps you to avoid unnecessary fees and helps you to maintain the account. Keep an eye on your account so you know how much money you have available, and to make sure you aren’t charged any surprise fees.

  • Open and review your statements. Be on the lookout for any unfamiliar transactions so you know someone hasn’t been using your card without your knowledge, and let the bank know if you suspect your card has been stolen so they can stop the card from being used anymore and send you a new one.
  • Keep track of your balance. Avoid spending more than you have in your account. Some accounts also have a minimum balance requirement, so you may be required to pay a fee if your balance ever drops below the minimum amount. We recommend signing up for transaction alerts and low-balance warnings via email or text.
  • Avoid overdraft fees. If you overdraw your account, like if you buy a textbook that costs more than the balance on your account, your bank may charge you a fee to complete your transaction. This means you will owe the bank for the fee amount plus the amount you were short on your purchase. Failure to repay these fees can impact your ability to open a new bank or credit union account in the future. Not all accounts allow you to overdraft, so it may be worth asking your bank if they offer this service and what fees they charge for it.

Download or print out our Guide to managing your checking account

Set up direct deposit for your student loans

You may be entitled to a refund of some portion of your student loans if there is money from your financial aid award left over after your school takes out the cost of tuition and fees. Be aware that if you would like these funds to apply to other things, such as on-campus parking or health insurance through your school, you will need to tell the financial aid office to do so because they can’t do this automatically. If you don’t need the money that is leftover right away, you can ask your student accounts office to have it apply to the next period and it won’t accrue interest until it is taken out or applied to the next term.

For most students, the best option to receive these funds is to sign up for direct deposit with your bank or credit union. After you have your bank account set up, share the account and routing numbers with your school’s financial aid office, and they will deposit additional aid funds directly to that account as early as 10 days before classes start. Once the release date has passed—provided you have signed the agreement, completed counseling, and have direct deposit—you can receive your money in 1-3 business days. Checks may take 2 weeks to mail, so make sure the financial aid office has your most up-to-date address, so the check does not need to be reissued.

Tip: To ensure you get your money as soon as possible, first-time borrowers or new PLUS loan borrowers must sign their loan agreement and complete a 25 minute interactive online entrance counseling course through the FAFSA website at least 5-7 business days before you can receive any student loan money.

After you set up direct deposit, money from work study, part-time, or full-time on-campus jobs can be automatically transferred to your account. When the money arrives, you can use checks or your debit card to access it.