Personal Finance

If you have looked at your 401(k) investment options recently, chances are you have noticed a list of funds that all have similar names with the exception of a year at the end of each. These “Target Date” funds were built as an all encompassing investment to help you plan for your retirement all in one product. These funds were allocated in a way where you would receive full diversification of both equities and fixed income, with maybe a hint of other diversifiers thrown in the mix. As you get closer to that “target date,” the fund gets more conservative. This sounds great in theory, but are you really getting the best option for your nest egg with this? All in the Family The way these mutual funds are built is by using the mutual funds in the fund family arsenal. For example, in a Fidelity Freedom Fund, you will find holdings such as Fidelity Series High Income or Fidelity Advisor Large Cap. Franklin Templeton investors will find items like Franklin Rising Dividends and Templeton Global Bond. You get the bad with the good with these “basket” funds. For every four and five-star fund you have access to, there is a dog that is limping along, dragging down your return. Apples to Apples? These funds can be very difficult to compare to each other. Investors in the 35-40 year range who are looking at a retirement age of 70, would look at a target date fund with a 2045. We looked at four different versions of these funds and have found glaring differences. First, in terms of allocation, there was a difference in equities in as much as 10%. The most aggressive was the American Funds version with 84%, of which 30% was international. Franklin Templeton and JP Morgan both came in at 78% with the first one having 28% international exposure and the second 31%. The least aggressive of the four was Fidelity at 74%. Of that, 31% was international. Looking at the fixed income side of the fund also showed a wide range of differences. While Fidelity had the least amount of equity, it pushed the envelope on the debt side with almost 70% having a credit rating of BBB or lower. Compare that to American Funds with just over 10%. The expenses of the funds varied as well. Using the A-shares, there was a difference in the Gross Expense Ratio of almost a full percent in these funds. These differences make it very difficult to compare them to each other. The Payoff? Ultimately, the big question is do these funds deliver? Take a look at the stats below (as of 4/30/2013): It may very well be that these target date funds are the only options in your retirement accounts. However, if they are not, you may be best served to look elsewhere for your investing needs. At the very least, look under the hood of these mutual funds and see how they are really doing. There are plenty of free resources out there for you to learn about these funds before you invest in them. What are your thoughts on target date funds? Leave a comment! The post Are Target Date Funds Worthy of Your Portfolio? appeared first on Money Smart Life.

Note: This is a post from Joan Otto, Man Vs. Debt community manager. Read more about Joan. Buy it now. Pay now. NOW NOW NOW NOW NOW. Sometimes, I feel like the internet is screaming at me like a particularly insistent 2-year-old. And like most insistent 2-year-olds, sometimes, it feels like the easiest thing to do is to give in to the screaming beast… even if it doesn’t have the best result in the long run. Yep, I’m talking about online shopping. Our Instant-Gratification Society Online shopping seems great. I can have anything in the world sent to my home – no matter how obscure! I don’t even have to pay for shipping, in a ton of cases! The prices are better than they are in retail stores! These are all true… except there’s a problem. Our instant-gratification society is taking the “buy it now” hype to an extreme. We’ve made consuming so easy that we do it without even thinking. You know the stories… people who’ve plunked down hundreds to keep playing their favorite Facebook or mobile games – but have done it 99 cents at a time. People who order 7 pairs of shoes from an online retailer that offers free returns, intending to send back six and keep one but not always following through. People who buy horses and other livestock in online auctions across the country - living things purchased site-unseen. And again, none of these things are evil, wicked, mean or nasty in and of themselves. But I worry about a culture in which it’s becoming commonplace to drop $700 in a click. Cash Vs. Debit Vs. Credit This is actually something we talk about in our You Vs. Debt classes, and it’s one of Baker’s key tips in his list of 24 Quick Actions You Can Do Today That Can Change Your Financial Life Forever: Spend cash whenever possible. There are any number of websites that will walk you through the ins and outs of budgeting, of envelope systems, and of the complex psychology of money. But I think we often overlook the simplest reasons this advice is so powerful. 1. Cash is harder to get. Even a debit card is easy – it’s (generally) in your wallet or purse, on your person. Credit cards tend to be much the same way. To go to the ATM and get cash, even if it’s literally next door, is harder! And, in terms of money, harder to get is a good thing! 2. Cash is harder to part with. We are a visually driven species. When I see a pile of money, I know that I have X dollars, whatever that may be. When I physically see that money dwindling, I know I have less of it. Big pile of money, little pile of money. And handing over $700 of my hard-earned cash, in bills, to someone in a store? YIKES. You can bet that’ll take some thought! But I could easily drop $700 online for an iPhone… in a click. Almost as an accident. And while I think that I think about my purchases, online or otherwise, the fact is, it is so much easier for me to spend online than it is in person because I don’t have to think very much at all. Retailers want it this way, of course! They love the idea that you’ll buy now and think later (if ever). Regrets? Well, you could return it. But they’re counting on the fact that most people don’t. Spending cash takes planning. It takes thought. And thought is a great thing to have where your finances are concerned. I’m curious what you think: Do you spend differently online than you would in a brick-and-mortar store? Why do you think so – or why not? We’d love to hear your comments!

There’s a lot to be said for paying off your debt and living debt free. But should you really work hard to pay off all of your debt right now? High Interest Consumer Debt vs. Other Debt Too often, we lump all debt together and call it “bad.” And while there is an argument that there’s no such thing as good debt, the truth is that some debt is worse than other debt. High interest consumer debt is the worst type of debt. This is money owed on things that we consume — things that don’t retain value and don’t provide the hope of income or some type of solid return later. Not only do you pay for something that won’t have the same value a year from now (or that might be totally gone a year from now), but you also pay a high rate of interest on it. Credit cards are a good example of this, since credit card debt often (but not always) results from purchases made for consumer items like clothes and electronics. High interest consumer debt doesn’t offer you the chance to build assets, and you almost definitely won’t receive any sort of return; you’ll just be paying high interest charges into someone else’s pocket. Other types of debt aren’t quite so terrible. While there’s a growing concern over student loans, and student loan debt can keep you down, it isn’t the worst thing out there. In fact, when used carefully and judiciously, student loans can help you get the education and skills you need to boost your earning power over time. Student loans often come with lower interest rates than consumer loans, which means you pay less for the privilege of borrowing. Depending on how you use low interest debt, you can see a return, whether it’s a mortgage or a business loan. But you have to be careful not to get carried away to the point that your low interest debt turns into a burden, rather than a benefit. Choosing to Put Off Paying a Debt Not too long ago, my mom asked me why I wasn’t putting as much as I possibly could toward my student loan debt. My answer was this: the fixed interest rate on my student loans is below 2% (I consolidated in 2005). I’ve been able to manage better returns than that on my investments. My annualized returns on my conservative retirement account have even beat that — recession and all. From my small P2P loan portfolio to my taxable account (used as my emergency fund) to my Roth IRA, my money is better used earning an annualized return of 5.5% to 7% (depending on the account) than it is paying down a debt that isn’t even costing me 2%. At least that’s my opinion. At some point, when my husband gets a full-time job as a professor, I might consider tackling the student loan debt a little more aggressively. But for now, it doesn’t make a lot of sense to me. Some debts are a little more urgent than others. You’re probably not going to earn 18.99% on your investments, so paying down credit card debt makes sense. But if you have low interest, non-consumer debt, you might think twice before retiring it. What do you think? Should all debt be paid off immediately? Or are some debts worth waiting on? This article originally appeared on MoneyNing.com. Let us know what you think (or read what others thought) here. Related posts: Is Debt Consolidation Right for You? Debt Snowball – Highest Interest vs Smallest Loans First Is There Such a Thing as Good Debt?

It’s time for another edition of Dollar and Cents. This is where I answer one of your questions. If you have a question, either use the contact form on the blog or use my Facebook Fanpage. This week question brings up something I’m semi-obsessed with – the Roth IRA! If you rollover a 401k into an IRA is this amount subtracted from what you are able to contribute that year? So if I rollover my 401k next year if I leave my current employer, will I still be able to contribute to my IRA as usual up to the limit or will the rollover affect this? Resources: With each Dollars and Cents video we want to provide some follow up links where you can get some additional information on the topic. If you are interested in learning about doing a 401k rollover into a Roth IRA, check out these reads: 7 Things You MUST Know About the Roth IRA for 2013 – There is a ton of great info in here for you. Before you open your Roth IRA you need to know if you even qualify. (Most people do, but still check!) Not sure how to rollover your 401k? Don’t worry, that’s in here, too. A must read on Roth IRAs. Best Places to Open a Roth IRA - With so many brokerage firms to choose from, how do you find the one that is right for you? This handy post breaks down costs for the major brokerages out there. Best Online Stock Broker Sign Up Bonuses – If you’re going to open up a Roth IRA with one of the brokerage firms you might as well get the biggest bonus that you can for opening the account! Can You Rollover Your 401k to a Roth IRA? – A complete breakdown of how to rollover your 401k into a Roth IRA. Start Saving For Retirement Today: Best IRA Online Brokers – Did you know you can open an IRA to do peer-to-peer lending?

When I started this blog, I wrote about the Smith Manoeuvre in the first month and implemented the controversial strategy in 2008.  For those of you new to the strategy, the Smith Manoeuvre is where you leverage your home equity to invest in the stock  market.  I modified the strategy by first paying down my mortgage with my existing non-registered portfolio, then invested in tax efficient dividend paying stocks while using the home equity line of credit (HELOC) to pay for itself.  In other words, I’m using the HELOC to cover the monthly interest payments without using any of my own cash flow by capitalizing the interest. Smith Manoeuvre Mortgages To set up the Smith Manoeuvre, the home owner needs a readvanceable mortgage combined with a significant amount of equity.  A readvancable mortgage is basically a regular installment based mortgage combined with a home equity line of credit with a small twist – the HELOC’s credit limit increases as the home owner pays down the mortgage. Changes to HELOC Rules Up until recently, homeowners could access up to 80% of their home equity in a revolving line of credit/HELOC and pay interest only on the balance.  With the new rules, homeowners can only borrow up to 65% loan to value (LTV) in a revolving HELOC.  If an investor has a mortgage free home valued at $100k, the new rules states that he/she can now only borrow up to $65k in the form of a revolving HELOC. However, the rules also state that you still have access to 80% of your equity, but the remaining 15% must be in the form of an amortized mortgage (installment mortgage) where the monthly payments are principal + interest.  Many thanks to Canadian Mortgage Trends in helping me clear up the details. How do the new HELOC rules affect the Smith Manoeuvre? First, people with existing HELOCs are not affected by the new rules.  However, even with the new rules, homeowners still have access to 80% of their equity, but now only 65% can be in the form of a revolving HELOC.  In order for it to be a true Smith Manoeuvre implementation, the homeowner will need at least 35% equity in their home. Final Thoughts While the new rules put a damper on those looking to implement the Smith Manoeuvre, all is not lost.  I’ve read that some credit unions will still allow up to 80% LTV on revolving HELOCs. If you are determined to use the equity in your home to invest with a readvanceable mortgage, a good bet would be to pay down your mortgage as much and fast as possible until you have at least 35% equity.  At that point, your revolving HELOC limit will increase with every mortgage payment which can be used for leveraging investments.  If you are aggressive, you can contact your mortgage provider to access the remaining 15% equity via a traditional installment loan/mortgage. For those of you considering the Smith Manoeuvre, what are your thoughts?  Did the new 65% LTV requirement change your view? Popular Posts: Canadian Discount Brokerage Comparison Top 6 ways to Save on Auto Insurance High Interest Rate Savings Accounts Top Cash Back Credit Cards in Canada Questrade Review Are Hybrid Vehicles Worth it? Tax Free Savings Account (TFSA) Copyright 2012 MillionDollarJourney – All Rights Reserved Related Posts:The Smith Manoeuvre – A Wealth Strategy (Part 1)Should I Start the Smith Manoeuvre?Manulife ONE Mortgage ReviewA Tribute to Fraser SmithAn Investment Loan and Excess Cash

This article was originally published on Cash Money Life | Personal Finance, Investing, & Career at Frugal Tip: Replace Your Rented Cable Modem with Your Own.When my wife and I moved to our current home we got a sweetheart deal on our Internet service for the first two years we lived here ($25 a month, plus a free cable modem for two years). Unfortunately, our two year intro period recently ended, leaving me with a higher monthly service fee, and a $5 a month rental fee for the cable modem. Unfortunately, this wasn’t a fee I could negotiate. $5 a month is reasonable as far as rental fees go, as some Internet Service Providers (ISPs) charge up to $7 per month for a standard cable modem, and often more if you have an integrated wireless router. But $5 a month is still a fee I’d like to avoid if possible, and thankfully, I can. Instead of paying the monthly rental fee, I bought a router for $77, including tax and shipping. My router will pay for itself in less than a year and a half, and everything after that is gravy. If you are currently renting your cable modem, then I encourage you to look into replacing it with one of your own. It is quick, easy, and relatively inexpensive. And it could save you hundreds of dollars over the life of the modem. How to Replace Your Rented Cable Modem You can save a lot of money by buying instead of renting. Buying a new cable modem is easy – simply go to your favorite electronics store, buy a modem, and you’re done, right? Yes and no. You also need to make sure your modem is compatible with your Internet Service Provider and you need to let them know you are replacing your modem so they can map it to their network. Don’t worry if this sounds like mumbo-jumbo, it’s pretty easy. Ensure your new cable modem is compatible with your ISP. The first step is to contact your Internet Service Provider to make sure they support the new hardware and software you are buying. I researched multiple cable modems before buying mine and I ended up buying the number two modem on my list of top rated modems. My first choice wasn’t on the list of supported modems provided by my ISP, which is too bad, because it was $11 cheaper than the one I bought. My ISPs support forums stated that others have used my #1 rated modem without any issues, however, they also stated they didn’t support any firmware updates. The modem I bought still had great ratings, so I figured an extra $11 was worth the price of avoiding potential firmware issues in the future. The modem should last me at least 3-5 years, so $11 is inconsequential over that time frame. How to find a compatible cable modem: The best way is contact your Internet Service Provider’s customer service department, look on their website, or ask in their forums (most have an active support forums for questions such as this). You can also visit your favorite search engine and type, “Internet provider name + compatible cable modems” to find a list. Important – make sure the modem you buy is forward compatible. There is one term you will come across when shopping for a cable modem: DOCSIS (Data Over Cable Service Interface Specification). DOCSIS is basically a data format that allows for high-speed data transfer. All most consumers need to know about DOCSIS is that they should buy a modem that is rated as DOCSIS 3.0, and backward compatible to DOCSIS 2.0. The reason is that most standard cable Internet packages are covered by a DOCSIS 2.0 modem, but the higher speed services require a DOCSIS 3.0 modem. It is likely that all cable Internet services will require DOCSIS 3.0 in the future. There isn’t a big cost difference to get the 3.0 version, so do it. It’s better to be forward compatible so you don’t need to replace your modem before its shelf life expires. Remember, the cost difference over a several years is inconsequential. Installing your cable modem Unfortunately, you can’t ju

As we mentioned a while back, we’re buying a home and it’s a very exciting time for us. It wasn’t always so exciting though and if you’ve ever looked for a home, you’ll agree. The actual task of finding a house you like can take a very long time and there are no guarantees you’ll ever find one you like. I’ve heard horror stories, they were horror stories to me anyway, about people having to look at a hundred homes before they found one they liked… only to lose out on it because their offer wasn’t good enough. A hundred houses. If you spend a minimum of half an hour inside, that’s still 50 hours. That’s more than a standard work week. Add in travel time and you’re probably pushing 80 hours. Two solid weeks. It’s incredible. Here’s the secret… it’s up to you to be efficient. Know What You Want This is easier said than done but this is the absolute most important piece of advice in this entire article. You need to figure out what it is you want, how much that will cost, and what you will need to sacrifice in order to get into a home. If you had ten million dollars to spend on a house, you can get almost everything on your wish list. Since you don’t have ten million dollars to spend on a house, something will have to give. It will take you a few homes to figure this out. You set up your house buying budget based on your actual budget, say it’s $300,000, and now you start looking at homes in the $275,000 to $300,000 range. In our area, that gets you a nice townhouse that’s probably 30-40 years old and not much land. If you want a single family home, you will have to sacrifice size and lot size. If you want a condo, you can get a bigger condo but then you are in a condo with no lot. It’s very important that every visit you go on advances you on the path towards ownership. Maybe you visit a few single family homes, see that they’re really close to each other, and decide you’d rather get into a larger townhouse. Then you want to start cutting small single family homes out of your search. Your agent should no longer show you those houses unless there’s a compelling reason they can tell you beforehand (such as “it’s a larger home but needs some work”). You will also waht to know what you don’t want. Know what is a deal-breaker and make those clear. Agents aren’t mind readers. Their job is to get your into a home you want to buy. They aren’t paid by the hour so it’s important to them that they find a good fit. In order to do those, you need to be open with them about what you like, what you dislike, what are must haves and what you must avoid. Search On Your Own You are constrained by your budget and with tools like Zillow and Redfin, you can do your own searching at your leisure. You can “visit” a dozen houses in fifteen minutes and through the magic of photos and virtual tours, get a sense of what you like and dislike. You can send the ones you like to your agent, along with your notes, and he or she can start to integrate that into their own searches for you. I liked searching on my own because it can give you a better sense of how much things cost and what you get for your money. Many of those websites give you historical sale data as well, so you know how much per square foot a home is selling for in your area. You can figure out whether your budget makes sense in certain neighborhoods. If you aren’t yet serious about buying a home, searching online is great because it’s very casual. You’re sitting at home in your pajamas flying around Redfin looking at houses. You aren’t taking up someone’s time, you can do it in the middle of the night, and it can be fun looking at multi-million dollar homes and their gaudy excesses. We used to go to open houses on the weekends at some of those homes with their grand entrance do

This is a post from staff writer Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool’s Rule Your Retirement service. Here’s an idea: Leave juvenile delinquents in a prison for three hours to be harangued by hardened criminals in an attempt to convince the kids to change their ways. That was the premise of the 1978 documentary “Scared Straight!” which won an Oscar and an Emmy. When it aired on TV, it was the first time some networks had allowed some very dirty words that you’d never hear from Mork or Mindy. Many correctional systems across the country tried their own versions. Unfortunately, studies indicated that all the cursing and yelling and in-your-facing didn’t have a positive effect (in fact, it may have backfired). But that didn’t stop “The Daily Show” from trying its own version — except instead of trying to save teenagers from a life of crime, this was an attempt to save them from student loans. The episode began with a nice fellow by the name of T.J. lecturing to seven high school kids in a classroom. T.J. has an illustration degree and $170,000 of debt. “I screwed my life up going to college,” he tells the kids. “I’ll be dead before these loans are paid off. Don’t make the same mistakes I did.” Unfortunately, T.J.’s reasoned approach didn’t get through to the kids, so correspondent Aasif Mandvi brought in two fellows who looked more like the people in the original “Scared Straight!” They took a more aggressive tone and used different language, such as “Student loans are like herpes with compound interest!” Longtime readers may recall that I think college is a big, fat, hairy rip-off, and that universities are at least somewhat immoral. But the truth is that I suspect my kids will go to college, and that my wife and I are saving for that expensive day. While a degree might enhance a graduate’s financial situation, the chances are increased by getting a debt-free diploma. However, there are only three ways to manage that: (1) build up plenty of savings before college; (2) get the most free financial aid (i.e., scholarships) possible; or (3) pay for college out of current cash flow. In this article, we’ll cover Option 1. For Option 2, read 15 Things You Need to Know About Financial Aid. As for Option 3, we’ll point you to a tool that will help you calculate how much college will cost you, so you know whether you can pay for it out of pocket. That tool is the savings calculator at Savingforcollege.com. It estimates the total cost of college based on your child’s age and tells you how much you need to save each month to reach that goal. The calculator has plenty of flexibility that allows users to fiddle with the assumptions, and it can even help look up the costs of specific colleges. Now that you know how much college may cost you — and you’ve recovered from your fainting spell — let’s discuss how to save for that big chunk of higher-education change. Where to stash your college cash You can save for college in a variety of accounts, but there are three main candidates: the Coverdell Education Savings Account, the 529 prepaid plan, and the 529 savings plan. Each option has the benefit of tax-free growth as long as the money is used for qualified higher-education expenses (otherwise, the earnings will be taxed and penalized 10%). Also, the assets can be transferred to other family members if the beneficiary doesn’t need the money (whether because of scholarships or mishaps). As for their differences: Pull up a desk, sit up straight, and keep your eyes on the chalkboard. Coverdell ESA What it is: An investment account that is opened with a brokerage or mutual fund company, owned by either the parents or the student. Limits: Up to $2,000 can be contributed annually. Contributions a

Since we last looked at the S&P 500's expected trailing twelve-month earnings per share some three months ago, the future for the S&P 500's forecast earnings has become considerably brighter going forward. Which is good, because it also suggests that the U.S. economy went through a recessionary period in the second half of 2012, from which investors are now expecting a recovery. We can see that's the case in comparing our 15 February 2013 snapshot of the S&P 500's expected trailing year dividends per share for the fourth quarter of 2013 (2013-Q4, ending 31 December 2013) with our new snapshot just taken on 17 May 2013: Here, for 2013-Q4, we see that investors have increased the level of earnings they expect to be reported for the S&P 500 in 2013 by $7.47 per share from our previous snapshot taken just over three months ago, with the new trailing twelve month figure now expected to be $108.18 per share. This is close to the level that investors had first expected for 2013-Q4 back on 17 January 2012. But then, back in those heady days, they also expected that the earnings for the S&P 500 in 2012 would be $12.80 per share better than the $86.51 per share that they actually turned out to be. (Note: Standard and Poor may continue to revise its earnings estimate for 2012 for some time still as more refined information becomes available and as companies might restate their previously reported earnings.) Looking at the full range of values that investors have forecast for the S&P 500's trailing year earnings for 2012, we see that they have ranged from a high of $100.07 per share, which was recorded back on 20 May 2012, to a low of $86.51 per share, as currently estimated. The low value of $86.51 per share also would appear to mark the bottom of an earnings recession for the index. So why didn't stock prices crash at the same time? Well, as we keep pointing out, earnings don't drive stock prices. Dividends do. And although this confuses many of the more dim-witted commenters at Seeking Alpha, the changes that have taken place in dividends since mid-November 2012 are almost entirely responsible for the rally in stock prices since that time. Or at least up to nearly the end of April 2013, after which the story changes. But we don't expect that certain people will appreciate that we've already told that story, and don't feel compelled to dumb it down for their benefit.... ReferenceSilverblatt, Howard. S&P Indices Market Attribute Series. S&P 500 Monthly Performance Data. S&P 500 Earnings and Estimate Report. [Excel Spreadsheet]. Last Updated 9 May 2013. Accessed 17 May 2013.

Photo: CollegeDegrees360 If you held a part-time job in high school, you may have a bank account or even a credit card in your name. But if you didn’t work — maybe you just cashed those babysitting checks — you may not be used to dealing with more than just some money in your pocket. In college it’s a different ballgame: 23 percent of full-time under-graduate students work 20 or more hours a week, and most college students work at least a few hours a week. Rather than blowing your hard-earned cash, you may need to save some of it for tuition, books and other college-related expenses. The best way to do that is to make sure you choose the banking solution that’s right for you. That’s exactly what my wife and I are helping our daughter do as she prepares to attend college this fall. Based on our research, here are the main banking options for college students, along with some of the good and bad things about them. College Students’ Banking Options The banking options are endless. Nearly all large banks offer student-specific solutions alongside their more traditional options. Here’s a quick breakdown of the main options available to students like you: School Bank Card Nearly 900 colleges and universities in the U.S. have debit card relationships with banks and other financial institutions, according to the N.Y. Times. Sometimes these debit cards look like regular debit cards, and they may include your school’s logo. Or your school may turn your student ID into a debit card. While these debit cards are convenient — you can often load your student loan disbursements directly onto them — they aren’t usually the best option. In fact, many of these cards charge hidden fees, such as the $38 per overdraft fee charged by the major player Higher One. So don’t just accept your school’s debit card arrangement. Instead, read the fine print and shop around before using one of these cards: Pros Gives you easy access to student loan disbursements; Is easy to use around campus; On some campuses, use of your student ID/debit card may net you discounts. Cons Lack of transparency means you may not be aware of all the associated fees; Higher fees are charged for typical college student financial behavior, like using another bank’s ATM or overdrawing an account. Traditional Checking Account (National Bank) Many large banks, like Citi and Chase, offer checking account options made just for college students. These accounts may offer lower fees than traditional banking accounts through these same banks. For instance, the Chase College Checking account waives the $6 monthly fee until you graduate, for up to five years after you open your account, as long as you have a monthly direct deposit coming into the account. Wells Fargo has a similar option, which waives the typical $3 per month service fee to students who link the account to a Wells Fargo Campus ATM, maintain a daily balance of at least $500, or post direct deposits of at least $25. Such affordable options as these can be great for college students, who need to make the most of every dollar. Still large for-profit banks may charge higher fees on other things, such as overdrawing a checking account or getting money out of a different ATM, according to Forbes. Nevertheless, this is likely the option we’ll choose for our daughter. She already has the Money account from Capital One 360, which I think is an ideal choice for college students. We can transfer money onto the account online, it accepts direct deposit of paychecks, and there are no fees. Pros Student account options are often cheaper than traditional accounts; ATMs and banks are widely available with large, national banks; You can get both checks and a debit card; Online banking can make managing your money easier; Many offer excellent checking account promotions. Cons Hidden, unexpected fees can drain your available cash; Customer se