The benefits and restrictions in opening student savings account

If you are a student and you want to seriously give a thought to the financial management plan, then there’s no second best option available for you than to go for a Student savings account. Whether you are a college student or a high school student or enrolled in any degree course in a university, Student savings account always works for your benefit and gives your financial management plans a big thrust. 

The savings account opened for students are quite different from the regular or the traditional savings account. The difference is that in case of the Student savings account there’s no minimum balance required to be maintained. In most of the cases, the bank pays certain interest amount, irrespective of the balance in the account. And now you’d like to know the best part. The savings account opened for students can be opened for as low as US $20 or even less. The minimum account opening cost may vary from bank to bank. In case of traditional savings account the opening cost is US $ 500 or even more. It is always a good idea to shop around well to know more about different banks and their terms and conditions. Also make sure that you choose the bank which offers maximum interest rate such that it turns out to be beneficial for you. 

The savings account opened for students comes with its own pack of benefits and restrictions. Let’s talk about the benefits first and then move on to list a few basic restrictions. 

Benefits of Opening a Students Saving Account 

• Benefit#1 – The account is pretty simple to open and students don’t have to work hard to go through rigorous paper work. And further, since there’s minimum paper work is involved, opening an account is fast.
• Benefit#2 –Students don’t have to pay IRS income tax over the interest with this type of savings account. This is a bonus and students therefore can build good savings too.   
• Benefit#3 –Students don’t need to keep a minimum balance always in the account in order to keep the account operational and functional as is the case with traditional savings account. There are no penalties charged by the bank even if the account is running on Zero deposit.  

Restrictions of Opening a Student Saving Account 

• Restriction#1 – You have to be a student to open a savings account. The age criteria also come to play its role here. Therefore, it’s not possible for a 60 or for that matter 50 year old university or college student to open this type of account.  
• Restriction#2 – The number of transactions that the student can make through this type of savings account is limited.  
• Restriction#3 – The number of withdrawals that the student can make through this type of savings account is also limited.  

The whole idea behind opening a savings account by a student is to develop the habit of saving and managing their funds right when they are young and studying.