Submitted by Lodinguan t3_11e4ssd in personalfinance

What are recommendations for a first banking institution for a first time young adult? Specifically, should I help my new turned 18yo set up a checking account with a brick/mortar bank (most likely Capital One as there's a nearby branch) or stick with an online only bank? I've banked online for many years (USAA/Ally/Chase) and am comfortable with those. But I'm not sure if that makes sense for a young adult pretty new to the whole checking account thing. There's no credit cards at this time. My child (adult now) has had a debit account linked to mine for years so is used to using a debit card.

Additional question, any recommendations for an online back if you don't like Ally/CapitalOne?

TIA

UPDATE: (to save on individual replies) Thanks everyone for your thoughts/suggestions.

Regarding Credit Unions, there aren't any near where we live so those aren't in the running.

Wells Fargo is a definite NO due to their horrific abuses of customers (read up on it if you don't know).

Regarding how kids earn/spend money - cash is NOT all that common among the teens in our circle. Jobs generally do direct deposit (so far both lifeguarding and child care jobs do this). School activities are often via a mobile app, so generally cash isn't used all that much. Access to ATMs is lower on the list of needs.

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Otterpotamus t1_jacc6e8 wrote

I've had good experiences with Capital One and would recommend them, especially if you have a branch close by.

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Werewolfdad t1_jacc8pa wrote

Young adults frequently have. Problems opening accounts online due to identify verification issues

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mjuntunen t1_jacccm1 wrote

Look at credit unions. They tend to give better customer service

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Engineer-Daddy t1_jacdiss wrote

The best bank for a young person is one that has many branch offices , atms, and physical locations nearby. I'd shoot for a Bank of America, or Wells Fargo.

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minimax34 t1_jace1nz wrote

Credit Union, better service, cheaper interest on auto loans, In my state all the diffenet credit unions are networked. I can go into any other credit union and do banking. No fees using any credit union ATM. It's a no brainer

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t-poke t1_jackja9 wrote

> The best bank for a young person is one that has many branch offices

Um, explain this?

Young people are less likely to need branch locations because they're not allergic to doing stuff online like my parents and others their age are.

If your paychecks are direct deposited, and you rarely need cash, you don't need physical branch locations.

And if you do need branches, BoA and WF are two of the worst.

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Engineer-Daddy t1_jacl9nm wrote

Younger people use cash for a lot of things. Many of them work as servers or side jobs that don’t offer direct deposit. It’s also convenient to have a location nearby in the event you make a mistake as they typically only have one card they rely on.

I dislike BofA and Wells Fargo but they’re extremely convenient, especially if it’s difficult to get around.

I bank at Charles Schwab and find myself using Wells Fargo atms 80% of the time.

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IntelligentHalf4367 t1_jad50qg wrote

Is she working, a student, both? Does she have significant savings or will this be mostly a spend account?

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titeywitey t1_jad55w3 wrote

I know everyone here loves to love credit unions, and that's great! They offer a lot of benefits if you are strictly looking at the return on savings accounts, getting a car loan from them, etc.

I like Chase because sometimes the best way to handle things is to go to the branch in person, and I've always had a great experience doing so. I wouldn't recommend that you use Chase for things like investment accounts however as their fees are very high. But for checking and savings, I believe the convenience of having physical branches everywhere should be part of the consideration.

Credit unions aren't everywhere, so you have to confident that you can get everything you need done over the internet or a phone call. I've never had as much success with customer service agents over the phone/chat as I have in person.

I banked with Wells Fargo in the past, but they wouldn't stop trying to push extra services on me everything I entered a branch, so I left them.

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Calvin-ball t1_jad6lfq wrote

Plenty of online-only banks offer ATM access through Allpoint or similar, and will reimburse ATM fees.

The bigger concern with banks like BofA are overdraft and account maintenance fees, which are more likely to penalize the young.

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congteddymix t1_jad7rot wrote

Depends on where you live but an 18 year old just starting out I would look at local to you credit unions or banks. If there looking at going to college many of those have favorable interest bearing checking/savings accounts for students with no fees or minimums and may be a big help if they would need a car loan or something in the near future. Personally think capitalone for regular credit card is fine but there savings and checking accounts sucks and anything they have that will pay you interest you have to have such high balances for it to work that its just not a great place for someone just starting out. Not saying this is everywhere but the credit union that I am at currently is paying 4% apy on checking accounts as long as you have 12 debit card transactions a month, direct deposit check of $400 a month and online banking statements. No minimum amounts required. Something to think about.

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onsereverra t1_jadacao wrote

When I turned 18, my mom insisted I open up my first checking account with a local brick-and-mortar bank in my area because she was sure I'd have all sorts of edge-case-type things I'd need to go in person to talk to a real banker about as I was embarking on my adult life. (She was also sure I would need to write a check every now and again.) College, multiple international moves, multiple different housing/renting situations, and multiple jobs later, I don't think I've ever gone to the brick-and-mortar location once, and I've certainly never written anybody a check. I do all of my banking on my phone.

I don't think there's any harm in opening an account at a brick-and-mortar bank; I've had a generally positive experience with mine, and still use that checking account as a "triage" space for my money before using it to pay off credit card statements, redirecting it to a HYSA, etc. But in this day and age there's not a compelling reason to stick with a brick-and-mortar if there's an online bank whose benefits you like better imo.

What I WOULD recommend is, if your 18yo is going to be a student this fall, getting them set up with a student credit card. I used my debit card all throughout college, stayed in the dorms all four years so never rented or paid a utility bill, then ran off to live abroad for a few years after graduating. By the time I came back, I had zero credit history whatsoever, but had aged out of any sort of young-and-new-to-credit offers. Building up from zero enough to successfully rent an apartment turned out to be a huge pain. On the other hand, I told my younger sister she had to get a student credit card while she was still in school, which she did and basically just used it to buy her groceries; and she was getting all sorts of great credit card offers within a few months of graduating and had no trouble at all landing a nice apartment in the city where she found her first job.

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hops_on_hops t1_jadaqmt wrote

Primarily an online bank like Ally, CapOne, Schwab. If needed, perhaps a local CU to deal with occasional cash.

Just stear clear of any "retail banks" like Wells Fargo, Chase, Citi, BoA. These places are full of BS fees, poor customer service, and poor products. They spend a lot on marketing and branch locations so they get a lot of customers, but they really offer no positives as far as banking experience.

If a bank has a "low balance" fee on their checking account that's a pretty clear sign you should avoid them.

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NCBronco t1_jadcyzv wrote

I would also recommend having your young adult get a credit card. It was a great way for our son to build credit. The bank will gradually increase the limit. It helped out son quality for a mortgage; he is a homeowner at 23.

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storyteller1010 t1_jae3b0x wrote

If they are going into college, often they can get a college specific checking account that has no fees. I used Chase for mine and never had a single issue with it. You can just ask to set up a college account. If not, Chase is still a great bank and ive never had any problems. Good luck!

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IntelligentHalf4367 t1_jae8hug wrote

What I would do with what I know of your situation is do the local credit union where she will be living for checking and a credit card, then do a savings account online with Ally, Wealthfront, etc that pays higher interest so she has the habit of using that account as she gets older.

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Asiannaise t1_jaeb85e wrote

I have a Capitol One MONEY teen checking account for my son and we're both happy with it. I also made him an authorized user on one of my credit cards at age 13 so he already has an established credit history. If your son is 18, he (emphasis on he!) really open an account anywhere--i would just look for something with no fees (and no minimum balances) since those can be gotchas.

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mckrd0 t1_jaeiu2a wrote

I bank with Discover and I love them! There are tons of no fee ATMs. They also have a student credit card which helped me build credit when I was in college. I’ve been with them for probably 10 years and I have never had any bad experiences. I get my paychecks early always, their customer service is top tier, and banking is so easy. Everything is all in one place online.

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FoldQuick742 t1_jaextt1 wrote

Since your kid is now an adult I would for sure set them up with their own bank so they know how it all works for when they are eventually on their own or married. I would also help them get started on a budget! I wish my parents showed me how to budget sooner in life. What we use now is YNAB and it is a life saver and makes money not as stressful.

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