The Bank That's Perfect For College Students

"America's most convenient bank" could lure a lot of customers away from its larger competitors

May 25, 2014 at 11:32AM

Source: Flickr / hbs1908.

College students are a huge potential market for companies to target. As of the most recent data, there are just under 17.5 million post-secondary students in the United States, including those in graduate school and professional programs.

While the concept of a student checking account isn't exactly new, banks are competing more than ever to win over this coveted and growing demographic.

The big companies like Bank of America (NYSE:BAC) and Wells Fargo (NYSE:WFC) their own products, but they should take a lesson from TD Bank (NYSE:TD) if they truly want to be student-friendly.

The big banks have some good products
One of the best options for students is Bank of America's MyAccess Checking account, which gives students unlimited teller access, overdraft protection, and a waiver of monthly account fees for as long as the account holder is in school. The account also includes the bank's MyExpression debit card, which can be customized for the account holder's school or favorite sports team.

Wells Fargo (NYSE:WFC), which is considered to be the best at selling multiple products to their customers, offers their College Combo, in which students have to sign up for both checking and savings accounts in order to avoid monthly fees. Wells also offers the most branches (6,200) of any of these banks, and more than 12,000 ATMs.

While the banks don't make too much money from college students (how can they, with no fees and unlimited teller transactions?), selling their products to students is a great way to build their future revenues.

Generally, student accounts convert to traditional checking accounts at a pre-determined point in time, and will begin to bring in fee income to the bank. Plus, college graduates earn more than non-graduates, so the banks can count on customers whose deposits are above-average and use their accounts more than average consumers.



But, they're missing something essential about college students
College students love convenience. I don't just mean the closeness of a bank's locations, but their hours of operation as well. In this respect, TD Bank(NYSE:TD) has a huge advantage when it comes to luring college students away from their larger competitors.

After acquiring Cherry Hill, NJ-based Commerce Bank several years ago, TD adopted their business model as "America's Most Convenient Bank." TD has longer hours than any other major bank with drive-through services available to midnight in many locations, and branches are open on weekends (even Sundays) and many holidays. In fact, TD only closes seven days out of the year.

When you combine this with TD's excellent student checking offering, which has no minimum balance or initial deposit, it's easy to see why the bank could be a real threat to the competition.



Know your target customers
One thing that's for certain about college students is that they keep strange hours.

There's a reason that college campuses have sandwich shops who deliver until 4 a.m. and have all-night coffee houses. A lot of students go to class all day, then go to a part-time job, which makes the ability to do their banking at night and on the weekends such an attractive option.

TD recognizes that not everyone in their target demographic can make it to a branch during normal banking hours on weekdays.

While this gives them an advantage in pursuing any customers, college students are one group that especially need the increased convenience. If TD decides to expand its operations (branches are mainly on the east coast), it could present a serious threat to its competitors.

TD is a bank who truly understands what customers want, and is willing to go out of its way to accommodate them. That's a winning formula over the long run, and explains TD's success and growth thus far.

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Matthew Frankel has no position in any stocks mentioned. The Motley Fool recommends Bank of America and Wells Fargo. The Motley Fool owns shares of Bank of America, Citigroup, and Wells Fargo and has the following options: short June 2014 $50 calls on Wells Fargo and short June 2014 $48 puts on Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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