What is a Student Savings Account?

Article Summary:

Student savings accounts are geared towards teens, young adults, and college students as they start to save money. These bank accounts typically come with benefits, such as waived overdraft fees and very low minimum balances, that make it easy for students to save. Student savings accounts, combined with other savings lessons, can help teach younger generations how to start saving money for their futures.

It’s never too early to start teaching kids about the value of saving money. For example, imagine this scenario. Your child wants the newest iPad with a host of expensive additions. Of course, his two best friends both have a top-of-the-line model that costs nearly $1,000, and your child is absolutely desperate to have one too. You promise you will get him a smart tablet. But when you take him to the store, you have to break the news that you can only afford a Lenovo M8 tablet for $125.

Although you might have to deal with tears, this is an important teaching moment. Money doesn’t grow on trees, and your son will have to learn how to save for those pricey items, just like mom and dad. Luckily, you can start by setting up a student savings account that will help nurture your child into responsible financial habits.

What is a student savings account?

The same banks that offer traditional savings accounts will sometimes offer specialized student savings accounts. These accounts give further flexibility than your child might find if they were to open up a regular checking account or savings account when they turn 18. Furthermore, as long as a parent signs on as an additional user of an account, they can open up a student savings account for a child as young as 13 years old. Your account may come with easy access to online banking and mobile banking as well.

As the best method of teaching is to couple explanations with real-life examples, opening up a savings account can be a surefire way to teach your child the value of money. If you or your child are over 18 and in college, it’s also a perfect way to learn how to budget your money without getting hit by fees.

Special features of a student savings account

What makes a student savings account different than any other savings account? Let’s go over some common features.

Lower minimum deposit

Most student savings accounts will have a minimum deposit as low as $25. Wells Fargo, for example, offers student savings accounts with a minimum deposit of $25 and a minimum student checking account deposit of $10. This can be significantly lower than the minimum deposits required for a traditional savings or checking account. In other words, if all you’ve got is enough for dinner at Taco Bell, you can still afford to open an account.

No or low overdraft fees

As children and college students are still learning how to read a bank statement, how to understand taxes and fees, and how to manage their money in general, banks offer no or very low overdraft fees on student savings accounts. This allows young adults and teens to make mistakes without facing drastic consequences.

Looking for a student savings account that has great flexibility with online and mobile banking to boot? Here are some options to check out.

Low or no monthly maintenance fees and minimum balance

As most adults know, banks will pay you interest to keep your money in a savings account as long you maintain a certain balance and meet certain requirements. If this doesn’t happen, then the account owner is subject to a monthly service fee or maintenance fee. Student savings accounts either have low monthly fees or no fees at all.

How to open a student savings account

When you are ready to open an account, you will need to meet certain requirements and provide some documentation.

Students ages 18+

Some banks will ask for documentation to prove that you are in fact enrolled in a college, university, or some other form of high school education. But most banks will just have an age limit on their student accounts, such as 23 or 35.

Pro Tip

Some banks offer “college” checking and savings accounts that are specifically designed for students. In this case, you will need to present some documents as proof of enrollment. Check with your bank to see what documents are required to open a student account. Foreign students may also be eligible.

Chase Bank, for example, has the following requirements to open a student savings account:


This could be valid:

  • Government-issued photo ID or driver’s license
  • Social Security card or Individual Taxpayer Identification Number
  • Passport
  • Birth certificate

Proof of address

It must show your name and the address of your residence. This could be a current and valid:

  • Lease document
  • Mortgage document
  • Utility bill, bank statement, or credit card statement

Opening deposit

A method for making your deposit, such as:

Students ages 13-17

Fortunately, your 13-year-old can’t just walk into the bank, open an account by himself, and then head down to the 7-11 to buy anything he wants. For children under 18 that need lessons on how to save money, they will need a parent or guardian with them to sign onto the account.

This gives parents a window into how their kids might spend their money if they someday decide to get a student checking account to go with the savings account. Once kids understand how valuable money is and how difficult it is to save, they might one day forgive you for buying that Lenovo tablet.

Learn about how interest compounds

If you are over 18, you should know the concept of compounding interest, at least in theory. Younger children might not have any idea how compounding works yet. You need to explain to them that you can make money from money and even more money off of that money. Confusing, no? The best way to facilitate this important lesson is to give kids a real-life example through a savings account.

3-year savings plan

YearsContributionFuture Value
Year 0$600$600
Year 1$1,200$1,212
Year 2$1,800$1,836.24
Year 3$2,400$2,472.96

Here is an example of how you can teach kids about savings and compound interest. You open up a student savings account and checking account for your 14-year-old child with $600. Each month, you give him $100 via a direct deposit, with 50% he can put in his checking account. The other 50% he must save in his student savings account which earns 2% interest.

In total, the child will have saved $2,400, but he will have earned $73 in interest. Earning money this extra money is an important financial lesson. That extra $73 helps drive home that saving and investing are smart tactics, whether you’re a young adult, middle-aged, or a retiree. Heck, your child might even open up a money market account or high-yield savings account as soon as they turn 18.


What is the difference between a student account and a normal account?

A student savings account or checking account acts just like a normal savings or checking account but with more flexibility. This usually comes in the form of a lower minimum deposit, little-to-no overdraft fees, and little-to-no minimum monthly balances and their subsequent fees.

Can a student open a savings account?

A student who is 18 or older can open a student savings account as long as they are under the bank’s age limit. They will likely need a government-issued ID, proof of address, and money for the minimum deposit.

What are the disadvantages of a student account?

The only disadvantage for those 18 and older is that the interest rate might not be as high as that of a typical savings account.

Is it worth getting a student bank account?

If you are over 18 and just learning how to manage your money, a student account that gives you a break on overdraft fees can be well worth it. For kids, it’s a great way to teach them about the value of money, how to save it, and how to earn compound interest.

Key takeaways

  • Student savings accounts are savings accounts geared towards teens, young adults, and students as they start to save money.
  • Student savings accounts are available to individual young adults ages 18 and older and kids ages 13-17 with a parent or guardian also on the account.
  • Student savings accounts come with flexible terms, such as lower minimum deposits, lower minimum balance requirements and associated fees, and lower or no overdraft fees.
  • Teaching your kids how to save money at a young age as well as how compound interest works can be priceless lessons.
View Article Sources
  1. Compound Interest Calculator – Investor.gov
  2. Best Savings Accounts for Kids – SuperMoney
  3. 7 Hands-On Ways to Teach Kids the Value of Money – SuperMoney