Credit & Money Management

Rude Awakening for New Grads

Freebie bank accounts end when students leave college.

By Anne Kates Smith, Senior Associate Editor

From Kiplinger's Personal Finance magazine, June 2010

As a new graduate of Butler University, Jennifer Pignolet will say goodbye to a couple of treasured college traditions this summer. One is basketball: The Bulldogs were runners-up at the NCAA championship this year. The other is her student checking account. Pignolet opened one at Chase with just $25 and has enjoyed a debit card with frequent-flier rewards points and free online banking and bill-payment. She didn't have to keep a minimum balance and paid no monthly fees.

But post-graduation, Pignolet's checking account, like many others designed for students, converts to a regular account. She'll pay $72 a year unless she arranges for direct deposit from a job she doesn't have yet or uses her debit card at least five times a month.

Grads who want to keep their freebies can explore a no-strings account from an online or community bank. Online banks such as USAA Bank or PerkStreet Financial offer free checking accounts with free checks, free online bill-payment, no monthly service fees and free ATM transactions. Young people who want to bank online and think they'll use a debit card ten to 15 times a month might prefer a free, high-interest checking account from a community bank or credit union. The Double 11 Credit Union, in Indianapolis, pays 4.11% on balances up to $11,000 if you make 11 debit transactions a month and one automatic payment or direct deposit. Go to www.checkingfinder.com to find other offers.

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