If you are planning to open a student savings account, then you need to know all about the account before you open it. This article presents the benefits and disadvantages of savings accounts for students so you can make a decision easily.

Benefits of savings accounts for students
Given below are the benefits of savings accounts for students that make it advantageous for students studying at a college or university.

• It is a safe and risk-free way of saving money. The money in the account can be used by the student to pay fees and other expenses.
• The student savings account is insured by the Federal reserve and offers safety.
• This account does not need a minimum balance and may not even need an initial deposit to open the account.
• There are no maintenance fees and no penalties for not maintaining any balance.
• Interest is paid on the money deposited in the account.
• A checkbook is issued to transact on the account. A debit card is also issued to withdraw money from ATMs.
• Usually, the first few transactions are free. Charges are levied only if more transactions are carried out.
• The money in a savings account can be easily accessed at any time.
• It is a good way to encourage the habit of savings and introduce the concept of bank accounts even before a young person starts working.
• Money can be deposited into the account anytime by anyone.

Disadvantages
If you are planning to open a student savings account, you need to know both the pros and cons. Having seen the pros of student savings accounts, here are the cons or disadvantages of opening a student saving account.

• The interest rate offered is not very high and is not a great incentive to save.
• The account is meant only for students and hence an age limit is fixed, which can be 24 years. This makes it disadvantageous for older students. There are many who work at an early age to earn money. They join college/university later. They cannot avail of the facility of a student savings account.
• There is a restriction on the amount that can be deposited in the account. This is done to prevent parents from parking their money in their children’s account. This can be a problem if the fee/expenses of the student are high.
• All transactions are not free. Only the first few transactions are free. For the rest, charges are levied. This may create a problem if more payments are to be made by students.
• While a savings account is handy, giving access to easy money with a debit card can act as a temptation for students, making them spend money unnecessarily.