What is Student Bank Account?
A student bank account is a savings account designed for students. The maximum age to open a student bank account in India differs from one bank to another. It can be either 21 or 25. Students need bank accounts not only to make payments but also to receive money from parents or loans from banks. The facility helps students to manage their money easily and conveniently by offering various benefits and discounts.
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Benefits of Student Bank Account
It is important to be aware of the various advantages that come along with a student bank account in order to get the maximum from the facility. Let us take a look at some of them.
Offers clubbed with student bank account:
These accounts often come with freebies and discounts like lower fees on credit cards and other financial products linked to the account. This makes banking more affordable for students. The online extension of banking in the form of net banking is another facility that makes things convenient for students.
Helps in gaining financial literacy:
When you open a bank account, you actually open the window to understanding how money works and how you can make the best use of it. The student is introduced to various financial terms and their relevance. It also helps to inculcate good saving habits.
Managing money becomes easy and convenient:
When students are staying away from home for their studies, they need to take care of various expenses and fees. And a payment and transferring of money become quite easy and convenient through debit cards associated with the bank account. Keeping the money in account keeps it safe and secure, thus helping them concentrate on other areas of concern. If going overseas for higher studies, you need the account for receiving scholarships, loans, or fund transfers.
Also Read: Why is Financial Literacy Important for Students?
The first step in saving money:
Opening a bank account is a great step towards acquiring the skillset to saving as well as responsible spending. It also teaches how your financial choices can affect your savings and what is the difference between wants and needs. By getting to know about long-term and short-term financial goals, you also understand the importance of keeping something aside for a rainy day in order to meet any kind of eventuality.
Range of offers from neo banks:
With the emergence of neo banks, students now have more options to explore instead of just going to traditional banks. Neo banks like NuCash offers student saving accounts where no minimum balance is required to keep the account active. A student credit card is also offered which doesn't have any maintenance charge. With minimum documentation, quick turnaround time, and a flexible working system, NUCash makes banking simple and customer-friendly.
Also Read: Neobanks for students: The benefits
Points to Consider when Choosing a Savings Account for Students
While pursuing your higher studies if you want to open a bank account, it's better to opt for an account carved out exclusively for students because of various offers and discounts associated with it. This is the first point to be kept in mind when scouting for a student bank account. Here are some others factors to be considered while choosing a student account.
Opt for a bank that offers a zero balance account. This means that no minimum amount is needed to be parked in the account for it to be active. As a student, it's not always possible to keep a minimum balance in the account and at times, this can become a financial burden. So, it's best to be careful in the beginning to avoid such hassles later.
Your bank account ATM card should come with a decent withdrawal limit. It should not be so low that when needed it does not serve its purpose.
Also, look at the interest rate offered with the deposits in your account. Opt for an account with high interest rate; however, this low rate should not be a trap into paying higher maintenance charges. So, do your research well and gain a good understanding of the related aspects before taking any decision.
Go for an account that does not pose the burden of maintenance charges for ATM card, credit card, or checkbooks. The duration of the waiver of these charges varies from one bank to another. For some banks, it can be a year, while for some it can be two.
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What Happens to Student Bank Account when You Stop Studying?
So once you have graduated, have you ever wondered what would happen to your student account? The answer is the account automatically gets converted into a basic savings account and with this ends all the associated freebies and discounts.
Now, you will have to pay all the regular interest and fees. It is also important to note that by the end of your graduation, you should try to pay off all your credit card debts if any so that you start afresh. Talk to your bank for the best rates that they could offer for your account and other financial products.
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FAQs
Q. Is PAN mandatory to open a bank account?
Yes, providing your PAN is mandatory to open any type of bank account.
Q. What do you mean by overdraft facility?
An overdraft facility allows you to withdraw more money from your account than what you have in your account. It is a kind of loan.
Q. Can minors get a student bank account?
A student less than 18 years of age can get a student account but it will be a joint account held jointly by a parent or guardian and the student. It can be operated only by the parent or guardian and not the student.
Q. Does a student bank account get an online banking facility?
Yes, students do get an online banking facility for their student savings account. But this net banking can be used only by parents in the case of minor students.
Q. Can a student bank account have zero balance?
Yes, some banks like SBI do allow zero balance for a student bank account. While some private banks like ICICI Bank do not allow zero balance and a certain monthly average balance has to be maintained in the account to avoid any fine.
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