By Peter Andrew

Student checking accounts in ancient history

As a student, I had a novel approach to the management of my personal finances. Let's call it the Ostrich Strategy because it mainly involved burying my head in the sand. Each semester various bank statements and (I assumed) increasingly threatening letters arrived from my bank, and these were carefully filed--invariably unopened--in a box under my bed. Twice a year, they were ceremoniously transferred from the box, the envelopes still sealed, into the nearest trash can.

The Ostrich Strategy worked well for me for two main reasons. First, the bank manager was a friend of my parents, and knew that I (or they) would eventually make good on my overdraft. And, secondly, it all happened a long time ago, in those distant days before credit scoring took off.

Student checking accounts now

You may or may not envy me the cavalier approach I was able to take toward my student finances, but one thing's for sure. Today if you try doing what I did some decades ago

by mimicking the behavior of Struthio camelus, you're likely to mess up big time. A dodgy credit score can give you a worse hangover than a frat house party, and it's one that's going to last for years after you graduate.

The good news is not only that you're almost certainly more responsible than I used to be, but also that you have way more products and tools to help you, as a student, manage your finances.

There's a great article that was just posted on the MoneyRates web site on just this topic. It lays out the key dos and don'ts of choosing and managing a college checking account, and names the eight banking products that its says are best for students.

Four things to look for in a college checking account

The Daily Campus recently ran a feature about finding a good student bank account, and it suggested looking out for the following:

1. Zero fees. There are many offers of free college banking out there, but watch out for those that require a minimum balance to qualify, and read the small print about fees.
2. Online and smartphone services. Even I might have managed my student finances better had I had free daily access to my account details. And if you opt for e-statements, you can do your bit for the environment.
3. Convenience Look out for ATMs or bank branches on campus or within an easy walk.
4. Linked checking and savings accounts Some banks link student checking accounts to high interest savings accounts, which often offer better interest rates than those for non-students.

If you're the sort of person who's happy to micromanage your finances, those high yield savings accounts can be useful, especially as some offer exceptionally generous incentives--beyond attractive rates--to save.

One thing NOT to look for in a college checking account

Also recently, The Sun Sentinel reported on the dwindling number of financial institutions that are offering no-strings free banking, even to students. It quoted research that suggested that the proportion had dropped, during 2010 alone, from just over three-quarters to just under two-thirds.

Often to qualify for these, you have to meet a number of conditions like maintaining a minimum balance, and if you fall below that balance for the month, you get charged a monthly fee. As the average monthly fee now adds up to over $100 a year, these are well worth avoiding. So it's lucky that there are often ways around them, and many banks still waive monthly fees if you increase your debit card usage, bank online, or link your checking account to another, such as a high interest savings account.

But the Sun Sentinel's report also offered an important piece of advice: don't be seduced by banks' rewards programs. These don't always live up to the expectations created in the glossy brochures that sell them, and should come a long way down your list of priorities. As Brian Riley, a consultant with Tower Group, told the newspaper: "You really need to be focused on the services you want."

Straining avian metaphors

Today's students need the wisdom of an owl when choosing their checking accounts, and the eyes of a hawk when managing them. Sorry, but the Ostrich Strategy is as dead as a dodo.

Image: renjith krishnan / FreeDigitalPhotos.net