How Students Can Save for Rainy Days?

If “debt” is a relatively common word associated to a 21st century student, then “saving” might seem like an odd word to find in a student’s vocabulary. In reality, though, almost half of the students today have savings account. A parent or guardian might have helped them set up these accounts, but teaching fiscal responsibility is part of the job description of moms and dads.

The importance of having a bank account is usually overlooked by students. When they get a holiday check from grandpa or when they have finally received their pay for their part-time job, putting this on a regular checking account is definitely so much better than squandering it on a shiny object. When these funds are put into a savings account, the student will earn interest as get quick and easy access to money when they need it. Even in today’s times of low interest rates, a student savings account still gives better rates than a regular checking account.

A Way to Budget

Saving accounts are great tools for budgeting. Using checking and savings account together should help separate different sources of cash. It will suddenly be easy to see just how much money is left from a job or how much money your family sent you for the holidays. Accurate record-keeping will also make spending much wiser. Such small step of transferring money will make a huge psychological difference. It can work as an emergency fund as well, which gives students the peace of mind when a student loan is delayed or more books are needed.

A Cash Reserve

Each student should use an instant access savings as their cash reserve. This means that money will not be spend immediately and can start to earn interest. In setting up a savings account, ensure that it can be accessed via online banking as this will make the process of transferring money to and from accounts easy. There are even services that allow you transfer money from one bank to another. It is always a good idea to open a savings account before you head off to the university.

Just like the case of youth savings accounts, the internet is filled with comparison tables that can be researched and browsed before you select the best account. From here, you can search on the banks’ websites for the full term details that you need to know, along with introductory offers on checking accounts for teens and students. They can also be a possibility for a scholarship opportunity in the future, provided by certain financial institutions.

But before you dive in, make sure that all conditions for your account are clearly understood. Practically all the top accounts today have an introductory bonus or special checking account promotions that begin with a promotional rate. The problem, though, is that the initial rate will most likely expire in a year’s time. 

Make sure that you check for dates when the promotion expires and set a reminder to switch to a new offer and call the bank for any more offers not publicly known. They are also youth savings accounts that limit the amount of allowable withdrawals, which may not work well for a student who will need access to emergency cash. Steer clear from these kinds of accounts.