Managing money as a college student isn’t easy. Usually, of the 43 percent of students who are employed, many have a limited income. Plus, it may be their first experience out on their own, so they may not have sound savings habits yet. Luckily, with the right savings apps, college students can set cash aside for a rainy day. Then, they won’t have to worry about the expected completely derailing their financial lives. Here are some of the best savings apps for college students.
For college students looking for an easy way to stash cash into an investment account, Acorns is hard to beat. The premise behind this savings app is simple. Every time the user makes a purchase using a connected account, Acorns rounds it up. It takes that round up and invests it according to the user’s portfolio profile selection.
Each of the portfolios is diversified since it is made up of ETFs, which is a bonus. They focus on ETFs, spreading out the overall exposure. Plus, they take a user’s risk tolerance into account, allowing students to choose a portfolio that leaves them feeling comfortable.
A savings app bolstered by machine learning, Digit aims to help people save through spending habit analysis. The app examines how a user spends money and finds moments where it can transfer small amounts of cash into a savings account without the person really missing it.
The goal of Digit is to make saving happen by ensuring it doesn’t disrupt your life. That way, college students can set aside money for a rainy day or major purchase without having to give much thought to it.
It’s important to note that Digit isn’t actually a bank, so it doesn’t pay interest in a traditional sense. But, it does offer quarterly 1 percent saving bonuses, which work similarly.
Another investment app that works well for college students is Robinhood. It lets users buy and sell stocks commission-free, giving everyone full control over their portfolio. College students can send their money to companies they believe in, which personalizes the experience. This can make it easier to create a savings habit, as users typically care deeply about their choices.
Plus, it supports fractional shares. With as little as $1, people can start investing in their favorite companies. As a bonus, any uninvested cash isn’t sitting idle in the account, either. It earns 0.30 percent APY (as of March 18, 2020), ensuring it grows while it’s waiting.
Technically, ChangEd isn’t a savings app. However, it can work wonders for a college student’s long-term financial health by saving them a ton in interest.
ChangEd works a lot like Acorns. It rounds up your purchases, snagging the round-up and putting it into your ChangEd account. Once your ChangEd account balance hits $100, the app whisks the money away, making an extra $100 payment on your student loan principal. Since this app helps college students pay down their student loan debt faster, it can help them save a bundle over the long-term.
Money management doesn’t have to be complex. With the Simple banking app, college students can take control of their financial lives. With the apps handy budget tools, users can divide up their paychecks to ensure everything is covered. The app even creates a Safe-to-Spend total, letting the account holder know how much of their balance they can use at any given point in time.
One the savings end, Simple helps by allowing users to easily set goals and see how much they can afford to set aside. It can even put money towards those objectives automatically, ensuring busy college students don’t accidentally forget to handle a transfer.
There’s even a round-up rule option for socking extra money away. Like Acorns and ChangEd, Simple rounds up a purchase to the next dollar. Once the round-up hits $5, it moves the money to the Protect Goals Account, keeping it safely set aside for a rainy day.
In many cases, the round-up approach is the easiest way to save money, and it’s relatively painless. Chime embraces the concept, rounding up transactions to the nearest dollar and shuttling that cash over into a savings account.
But Chime also goes further. Savings accounts can also earn 1.10 percent APY, which isn’t too shabby. Sure, there are higher interest rates available, but most of them don’t come with the round-up savings feature. Plus, the 1.10 percent still beats the average of 0.09 percent by quite a bit, which is another point in the app’s favor.
Bank of America Keep the Change
One of the first banks to use the round-up approach, existing Bank of America customers may want to sign up for the Keep the Change program. It lets customers save with ease, and may be the simplest approach for busy college students who already bank with BofA. As long as the customer has a checking and savings account, they can give Keep the Change a try. Plus, monitoring progress is easy, as it’s all viewable through the Bank of America app.
What are some of the best savings app for college students that you know about? Let us know in the comments below.
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Tamila McDonald has worked as a Financial Advisor for the military for past 13 years. She has taught Personal Financial classes on every subject from credit, to life insurance, as well as all other aspects of financial management. Mrs. McDonald is an AFCPE Accredited Financial Counselor and has helped her clients to meet their short-term and long-term financial goals.