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My son is in college out of state and we have set up a bank that I transfer money to, but there is no physical location for him to get cash or in-network atm.

I just got him a grocery debit card to keep track of food expenses and earn savings. In order to put money on it, he needs cash. Thus, I opened an account at a bank located in both our states so he could withdraw cash and put it on the grocery card. It seems so confusing, but it was the only way to avoid fees and keep track of expenses easier.

So... the question is... since the new bank is simply for transferring money for him to withdraw cash to put on the grocery card... is it better for him to leave some money in the account or does it matter? I suggested he leave $25 in the account and not zero it out each month and he asked me why. I found I had no good explanation other than that is how my mind works!

  • I edited the title, since "Student Checking Account" isn't descriptive of the question. – RonJohn Jan 25 at 14:27
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    The grocery debit card (never heard of such a thing) makes sense if you are the one putting money on it, and your son can only use it. Since he has to withdraw cash and put it on the card himself, why doesn't he just use a card attached directly to the bank account? – chepner Jan 25 at 19:49
  • It sounds like you're transferring money to two separate bank accounts, one which has a physical branch for your son to withdraw cash and the other which doesn't have a branch by your son. Did I understand that right? If so, why not just use the bank with a branch by your son? – lizziv Jan 27 at 18:45
  • Can you tell us more about the grocery debit card? Is it backed by a bank? I'd imagine that there must be a mechanism to transfer money directly to it, electronically, versus literally needing cash. – dwizum Jan 27 at 19:49
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YMMV, but my bank (Chase) auto-closed an account after seeing it sit empty for 90 days.

Since you refill it every 30ish days, that won't be a problem. It would certainly be a problem over the summer, though (presuming he doesn't take summer term classes, or have a local internship), but $25 then would solve that problem.

Still, I'd counsel my child to leave some money in the account for emergencies, as a proto Rainy Day Fund.

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The bank may charge fees if the balance drops below a certain threshold, and may may close the account if the balance stays at $0 for too long.

In general you don't want to allow your checking account to drop close to $0 because of the potential for overdraft fees or declined payments from an auto-scheduled payment or if someone tries to cash a check you wrote. Those don't seem like concerns in your case, but it's not a habit I'd want to encourage my child to develop.

As an aside: this setup seems unnecessarily complicated. Is there a reason you need to monitor your son's grocery purchases in detail? If not, help him draw up a plan for his grocery purchases including what he'll buy and how much he'll spend. Give him $X per month for groceries and have him use a debit card linked to the bank account you're funding. Learning to track your spending and stay within a budget is a valuable skill, and college is a great time to learn it.

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