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Finding the best student checking account

Waive first-time penalties
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Put finances on autopilot

It's easy for students to make mistakes when they first open their checking accounts, Walbert says. In many cases, they may not keep a good record of their spending and as a result, they may overdraw their checking account.

When that happens, there's usually a nonsufficient funds, or NSF, fee of at least $35, she says. But some student checking accounts will waive this penalty the first time it occurs.

"I think we should all get one 'oops' that we're not penalized for," she says.

In addition to receiving "forgiveness," Cyree says some students also may be able to link their checking account to a savings account or line of credit as a backup. If the student overdraws the checking balance, a deposit from the backup account would automatically be transferred into the student checking account.

The bank may charge a fee to make a transfer, but it would likely be much smaller than an NSF charge, he says.

Waiving penalties and using backup accounts can be helpful, but students should be careful not to let it lead to a false sense of security, Cyree says. Otherwise, it could lead to another potential problem from young adults -- the misuse of credit.

"We don't want to give our college students such a large safety net that they'll feel it's OK to continue to make the same financial mistakes," Cyree says.


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