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For all the talk about their quirkiness, the young adults known as millennials make surprisingly conformist choices about where to bank.

A survey of banking habits by suggests 45 per cent of millennials used recommendations from family and friends as the main input for deciding on where to bank. That’s pretty much double the rate for Gen Xers, and vastly higher than the 8 per cent of baby boomers who said they chose a bank this way.

A good bank for a young adult in college or university or starting out in the work force is one that offers all needed services with no monthly costs and offers a great rate on savings. Mom and dad’s bank? Chances are good that it’s one of the big banks, which are lukewarm at best for young-adult needs.

For subscribers: Student finance 101: How to pay for school, control spending and avoid debt

All the big banks offer no-fee chequing accounts for students, but some put a limit on the number of debit transactions you can do without incurring a charge. On savings accounts, the major banks earn a failing grade in providing a no-strings, high-interest savings account where you can park money you’ll need in the months ahead for books, rent and other expenses (Bank of Nova Scotia’s Momentum account is an exception).

After graduation, young adults typically must make the transition to the usual range of chequing accounts. One exception is Bank of Montreal, which offers free student banking for an additional year after you graduate (Canadian Imperial Bank of Commerce offers an extra six months).

The best bank for millennials who are either in school or recently graduated? My answer to this highly subjective question is a name you may not know, Alterna Bank, which is an online bank owned by credit union Alterna Savings and a member of Canada Deposit Insurance Corp.

Alterna Bank offers a no-fee chequing account with unlimited Interac e-transfers, a must-have for young people who rightly disdain paper cheques. Alterna also has a savings account currently paying a competitive 2.05 per cent (2.1 per cent for tax-free savings accounts). ATM access is available through The Exchange, a network that includes credit unions across the country and big institutions such as National Bank of Canada, HSBC Bank Canada and Manulife Bank.

Alterna Bank is unknown to many because it doesn’t have branches, and because so many people are unwilling to consider alternatives. The survey of banking habits found that 42 per cent of millennials had been at their primary bank for 11 years or more, 46 per cent of Gen Xers had been at their main bank for 16 years and 54 per cent of boomers were at their bank for 21 years or more.

Loyalty, complacency, solidity – these factors all influence people to stay with their existing bank. Established clients with mortgages, lines of credit and investments may find it handy to consolidate with one bank for the long term for reasons of convenience and for leverage in negotiating interest rates and fees.

But students and young adults just entering the work force have no such reason to follow their parents’ lead on where to bank. High-profile alternatives to the parental status quo are Tangerine and Simplii Financial, online players owned by Bank of Nova Scotia and CIBC, respectively. Both offer no-fee chequing, with free access to the ATM networks of their parent banks.

Both also offer second-rate interest on their savings accounts – 1.25 per cent as of this week. Tangerine also charges $1 for Interac e-transfers, although slower e-mail money transfers are available for free (they take two to three days for the money to be transferred after the recipient accepts the transaction, while money sent via e-transfer arrives as soon as the transaction is accepted). Simplii offers unlimited free e-transfers, as do more and more banks and credit unions through their mainstream chequing account packages.

Ratehub figures the average millennial has paid $760 in banking fees over their lifetime. The typical chequing account offering unlimited transactions costs $15 or so monthly at a big bank these days, which projects out to $7,200 over 40 years. This cost may seem acceptable if you’re in your prime earning years, but it’s extreme for young adults. The right price for banking at this stage of life is zero.

Check out my column from last Saturday for deals offered to young adult investors by online brokers and robo-advisers.

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