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| Academic Performance | Financial Survival | Social Life | Nutrition and Health | |||
By
UniversityAdvice.com Staff,
January 2005
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When leaving for university, students are often overwhelmed with the amount of financial advice they receive. Student loans, books, tuition, residence - the list goes on. However, most students are never informed about one of the best ways they can save their money: where they decide to keep it. Many banks offer student accounts, but not all accounts are equal. With the advent of on-line banking, students now have a far greater choice of banks and account types than ever before, and spending a few minutes informing yourself on your options now could earn you several hundred dollars during your time as a university student. Below, information is cited from several different banks. Efforts will be made to keep this information up to date, however it is strongly recommended that you verify the exact details of each banking plan before making a final decision. "Traditional" Student Banking First, lets consider the "traditional" student accounts offered by the big banks. The student accounts from TD Canada Trust and CIBC will be used as examples. TD Canada Trust Student Account
CIBC Student Account
Essentially, you are earning practically no interest on the money you are saving, while at the same time being forced to pay several dollars a month in service fees and possibly transaction fees if you surpass the allotted number of transactions per month. Alternative Banking Options Several students have found these two "traditional" accounts and those offered by the other big banks to be less than ideal, and have therefore sought an alternative. They found it in some of the newer financial institutions, two of which are examined now. ING Direct
Invesment Savings Account
PCFinancial
Interest First Savings Account
Clearly, the potential for savings and (dare I say) earning money by using these alternative banking solutions are tremendous, provided you are willing to shop around a little. The Benefits of the Alternative Banking Options The best way to motivate yourself to investigate alternative banking solutions is to see just how much money it can save you. Consider how much money you would earn in interest by investing 2000$ in each of the different bank accounts for one year, without making any transactions. (These are rough numbers, ignoring interest made on interest)
Based on
these figures, ING and PCFinancial are the way to go, earning 43x and
50x more than TD, and 21x and 25x more than the CIBC account. Of course,
these earnings do not include the transaction fees and service charges
you would incur for making certain numbers of transactions or failing
to maintain a minimum balance if you're not fortunate enough to have 2000$
lying around. However, when these factors are considered, the gap between
the new internet banks and the old "big" banks is likely to
increase. Don't forget that you can mix and match your banking accounts, so if you find features in two banking accounts that you like, calculate the costs associated with having them both, and decide if opening two accounts is the the most economically viable decision. This way, you can get all the features you want from your bank account, while making several hundred dollars to offset your other expenses. The UniversityAdvice.com Editors' Bottom Line For students earning a 10$ an hour, an investment of a half hour to apply for a new bank account is equivalent to working 4.5 hours less in the next year, or of paying for half a new textbook. Based on my personal experience, I have found ING Direct to be ideal for my most of my banking needs, while paying one of the highest interest rates in the business. Of course, it is up to each student to determine what his personal banking needs are and to take a few minutes browsing each bank's website to see what kind of plans they offer. Find the plan that maximizes your money and allows you to complete transactions as conveniently as possible, and you'll soon find looking at your account statements to be a much more pleasant experience. Enjoy saving!
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