Best Student Savings Accounts

College students are often experiencing some level of financial independence for the first time, and a savings account is a good first step. It can help you set aside money for the future as well as help your money make money. Below are our picks for the best savings accounts for students.

What to consider when choosing the best student savings account

The most important tip when it comes to choosing the best bank for your student savings account is to consider all of the pros and cons, not just the APY the bank is paying.

For one thing, it's important for students to realize that bank account APYs are not permanent and aren't guaranteed for any specific length of time. Just because a specific savings account has a higher yield than the others right now doesn't mean it will stay that way.

With that in mind, here are some tips for picking the best student savings account.

• High APY: APY (annual percentage yield) isn't everything. But all other factors being equal, a higher yield is better. This is generally why most (if not all) of the accounts we feature on our best-of lists are from online banks -- they simply pay better than branch-based bank accounts in nearly all cases.
• Mobile app experience: The last thing you want is a clunky, difficult-to-navigate mobile app. Before you choose a student savings account, check user reviews of the bank's app on the App Store or Google Play Store.
• Customer service: Unless your bank has physical branches, you'll be relying on other means of customer service than in person. Make sure the bank's phone support hours are a good fit for you, and take note of any other ways you could get help if you need it, such as live chat support.
• Access to your money: It's important to make sure that when you need to access your savings, you'll be able to do so in a reasonable amount of time. Some (but not all) banks provide ATM access for savings account customers, so make sure to choose one that has it if that is important to you.

What is a student savings account?

Technically, a student savings account is a bank account specifically designed for students to be able to save money they don't need for day-to-day expenses. And these look different, depending on the bank that offers them. Some might specifically require the account owner to be enrolled in a college or university, while others may simply require the account holder to be within a certain age range.

One of the biggest reasons student savings (and checking) accounts exist is to make it easier for younger people to start saving money, with features like lower deposit requirements, no monthly account fees, etc.

Student savings account vs. traditional savings accounts

If a bank offers both student and non-student savings accounts, aside from the age restrictions, there are some other common differences. For example, if a bank charges a monthly account activity fee on its standard savings account unless certain requirements are met, it might not on student accounts. If a bank requires a minimum deposit to start an account, it might waive this requirement for students.

Why should a college student open a savings account?

College is the first time many young adults are managing their own finances to one degree or another, and a savings account can help establish smart financial behaviors. While a checking account can help a college student budget their living expenses, a savings account can help them build up an emergency fund and show firsthand the power of making their money work for them.

Student savings account fees

The most important type of fee to watch for is a monthly maintenance fee. This is most common among branch-based banks and can be anywhere from $5 to $25 per month, depending on the bank and the nature of the account.

There are usually some ways to avoid a monthly maintenance fee, such as by maintaining a minimum account balance or setting up an automatic recurring transfer from your checking account. But the best way to avoid a monthly maintenance fee is to open an account at a bank that doesn't charge one at all.

Other common savings account fees include:

• Returned item fees: For example, if you deposit a check into your savings account and it bounces, your bank might charge you a fee.
• Wire transfer fees: Virtually all banks charge for outgoing wire transfers, and while college students usually don't need to make wire transfers (they're especially common when you're buying a house), it's important to know what they cost.
• Inactivity fee: If your account sits idle for months at a time with no deposits or withdrawals, your bank may impose a fee.
• Overdraft or non-sufficient funds (NSF) fees: These are more common with checking accounts but can also apply to savings accounts. You can avoid these fees by making sure there's enough money in your account to cover any scheduled payments.

How much do I need to open a student savings account?

Some banks have a minimum deposit requirement, but most online banks don't. And if the account is specifically a student savings account, the minimum deposit requirement is typically lower than the bank requires for standard savings accounts.

Discover more savings accounts top picks:

Our savings account methodology

At The Motley Fool Ascent, we rate savings accounts on a five-star scale (1 = poor, 5 = best). We evaluate all savings accounts across four main criteria: annual percentage yield (APY), brand and reputation, fees and minimum requirements, and perks that really make a difference -- think ATM access, linked checking accounts, or even branch access.

Our scores are weighted as:

• APY: 50%
• Brand and reputation: 20%
• Fees and minimums: 15%
• Other perks: 15%

Our aim is to maintain a balanced list featuring top-scoring products from reputable brands offering competitive APYs and standout features. Learn more about how The Motley Fool Ascent rates bank accounts.

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