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5 things to look when opening a student savings account

Worried about finances abroad? A student account helps you to manage your finances and transact in nearly all major currencies.

We know it may be a little weird as you are moving out of your parent’s umbrella and starting a very crucial chapter of your life. Excited for your first year at a university abroad? One of the first things you will have to do is to open a Student Bank account.

Here are the five things that you should keep in mind before opening a student savings account. Banks in India open a student’s account as NRE (Non- External) specially created for students, so you can manage your finances with ease and convenience when you are studying outside India.

Things to look for while opening a student saving account

Things to look for while opening a student account

  1. Bank Fees: We highly recommend you to carefully read through the terms and conditions before signing up with a bank. The set of charges in a student account is different from a normal savings account. You surely don’t want to get shocked to see unexpected charges such as charges for withdrawing cash from other bank’s machines or unauthorized overdrafts.
  2. Overdrafts: Usually banks tend to offer an overdraft facility to students at a fairly less interest rate than the market. It is really beneficial to have this facility when you are a student on a tight budget. Look for the bank that extends the highest student overdraft because you never know when you are in an emergency that requires immediate need of funds.
  3. Freebies: Banks do offer some incentives to students to bank with them. However, you should not just open an account based on these benefits. Most of the banks offer just short term cash backs and discount schemes. It is a smarter practice to evaluate an account holistically. After all, there are some discounts that you can simply get with your student ID, so opening a bank account solely because of freebies is not worth it.  
  4. Convenience:  There are plenty of points where you can avail a banking service like ATMs and mobile kiosks. However, it is always good to have a branch of your bank nearby in case you wish to interact with banking personnel. Also, look if the bank provides internet and mobile banking. It saves travel costs and commute time and most of the students prefer mobile banking applications of net banking
  5. Minimum balance: The requirement of maintaining a minimum balance varies across banks. ICICI‘s student bank account has a minimum balance requirement of Rs 5000. Make sure that you know what is your bank’s minimum requirement in order to avoid unexpected charges

Documents required to open a student saving bank account  

  1. Passport:  Photocopy of the First and last four pages of the passport (pages with your name, address, date of birth, date and place of issue, expiry date, photograph, and signature). The signature should be clearly visible and match the signature on your registration form.
  2. Valid student visa: In order to open an operational student bank account you need to submit a copy of your valid student visa/ identity card from the university to be obtained to confirm student status. An I20 form would be required in the case of students traveling to the United States of America.
  3. Address proof: A student is supposed to submit a complete list of both Indian and overseas addresses.

Benefits of a student bank account:

  1. Tax benefits: The interest you earn on your deposit in a student bank account is not taxable in India unlike interest earned on a normal savings account
  2. Wide access: Student account holders get an international debit cum ATM card meant to provide convenient access in most of the countries. Money could be withdrawn in nearly all major currencies. However, there is a hefty charge for every withdrawal you make. 
  3. Easy Movement of Funds:  A student saving account being an NRE account is fully repatriable. Repatriability of funds means that it is capable of being withdrawn from an account in a foreign country and then deposited in any other country in a totally different currency. In simple words, a student could withdraw money from his account and deposit it into an account in any other country.

Conclusion:

Student account is not so popular in India, therefore only a few banks extend this facility. Student account is also available as a NRE (Non-residential External) account that offers account holders a huge spree of services like overdraft facility and international Debit cum ATM card. We recommend you to thoroughly go through the terms and conditions before you open an account to avoid unexpected charges.


Related Articles:

5 best student savings account you should consider opening this year

Tips to pay off your student loan ASAP

3 simple ways to earn Extra Money as a Student


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