There are plenty of choices for students to make this time of year. On Monday, Bank of America announced that there will be one more banking option available to students before they go back to school that will save them some money.
The SafeBalance Banking account is now available with the monthly maintenance fee waived for students under the age of 24 while enrolled in high school, college or a vocational program. Previously, only Bank of America’s Core Checking account had a fee waiver for students under age 24 and enrolled in school – so the waiver has been now extended to the SafeBalance Banking account.
SafeBalance Banking account eliminates overdraft fees
One of the benefits to a SafeBalance Banking account is that Bank of America doesn’t charge overdraft fees on this account or allow accounts to be overdrafted. Transactions are either declined and returned unpaid if you don’t have a sufficient balance in your account for the purchase.
Jason Martin, consumer checking and debit product executive at Bank of America, says that after launching the SafeBalance Banking account a couple of years ago that Bank of America has recognized that the product helps younger customers build a solid foundation early on.
While the bank doesn’t charge overdraft fees, it’s still possible to have a negative balance if the purchase is approved for one amount and then later posts to the account for a larger amount. For example, a restaurant meal that is authorized before a tip is added may fall into this situation.
SafeBalance banking customers can’t use paper checks on this account. Checks written are returned unpaid. So, if you want to have the ability to write checks – and the ability to opt in for overdraft protection – then the Bank of America Core Checking is the better fit for you. Email and mobile transfers or Online Bill Pay are some of the options when SafeBalance accountholders must transfers funds to others.
SafeBalance offers rewards, saving opportunities
Another perk to the SafeBalance Banking account is that it’s eligible for BankAmeriDeals. Students can earn cash back deals when they pay for purchases using their Bank of America debit card. The cash back is automatically credited to the student’s account by the end of the next month. BankAmeriDeals is only available at participating merchants.
One savings strategy might be to move that cash back right into a Rewards Savings account, since that account now has a fee waiver available for students with either a Bank of America Core Checking account or a SafeBalance Banking account. The Rewards Savings account earn an APY ranging from 0.03 APY to 0.06 APY. Higher APY savings accounts might be a better option to complement your checking account.
With the SafeBalance Banking account, students will be able to get an early start learning how to manage their finances. A sole owner on the account can be as young as 16 now, with the reduced age requirement. Previously, the age for a sole owner was 18. Note that some other institutions may require a parent or guardian be on the account as a joint signer if a student wants to open a checking account before turning 18.
Do other banks have a similar account?
Many banks and credit unions have student accounts. Unlike the SafeBalance account, you might have to unenroll out of the bank’s overdraft policy to avoid overdraft fees if you make a purchasing mistake – spending more than you have in your account.
For instance, the Chase College Checking account also has a $0 monthly service fee for up to five years while in college. A direct deposit or an average ending day balance of $5,000 or more in the Chase College Checking account can also help you avoid the monthly service fee during each monthly statement period.
A comparable option is Wells Fargo’s Everyday Checking. This account has a $0 monthly service fee for college-age students when the primary owner is 17-24 years old.