Student Bank Accounts
When looking after your money, a bank account, especially a dedicated student account, is something you'll need. Almost every bank has some form of offer for new students wishing to open a bank account when they first start university.
The offers are not as great as they used to be so we have a comparison chart below for the best student accounts with links to the banks and what they have for you.
Choosing a Bank Account
It may be all too easy just to go for the best offer or discounts available from each institution. The banks know this because it's likely you'll stay with them for the rest of your life as it's hard to switch to another lender (which it isn't).
Check for rates of interest on current account, overdrafts, credit cards and any savings you may have. Also see if they will offer you a bank loan at favourable rates and what their fee free overdraft limit is as you'll probably need it at some point whilst at university. You should see if they offer online and telephone banking as this makes it easy to manage your account.
Go for the Highest Overdraft
If you're like most students, you'll be building up a lot of debt from living expenses and course fees. So our advice is to go for the bank that offers the largest overdraft and all banks offer students completely fee free overdrafts with no fees or interest. There are two banks that currently offer a massive £3,000 and these are Barclays and the Halifax bank.
Be aware that these are so-called arranged overdrafts. Going over pre-arranged limits gets you into serious trouble and high associated charges. The fee-free period does not last forever, and you'll need to repay your overdraft at some point. Once you've completed your course, you should look at moving to a graduate account.
Bank Account Comparison
Here is an overview of the major banks that offer student accounts in the UK. As mentioned above it's best to go with the bank that offers the largest free overdraft facility as it's unlikely you'll have much spare cash to worry about the savings rates. Don't worry too much about getting a local branch that's on campus as you can withdraw cash at any ATM.
| Bank Name | Freebies? | Free overdraft | Credit card? | Savings Interest |
|---|---|---|---|---|
| Santander 1-2-3 | Railcard | £2,000 | Visa debit | 3% |
| Barclays Student | none | £3,000 | Contactless | 0% |
| Halifax Student | none | £3,000 | Visa debit | 0.10% |
| HSBC Student | £60 gift card | £3,000 | Debit | 0% |
| Co-op | none | £2,000 | Debit | 0% |
| Lloyds Student | NUS extra card | £1,500 | Debit | 0% |
| NatWest Student | Coachcard | £2,000 | YES £500 | 0.10% |
Some overdrafts are tiered the longer you stay with your lender. Other terms and conditions may apply such as signing up for paperless statements. The railcard incentive provides one-third off train travel within the UK. You can open any of these accounts to receive the initial incentive, then close the account and move somewhere else.
How to Open an Account
All banks allow you to open student current accounts online, although you'll need to provide physical documentation to pass any money laundering regulations. You'll need to be over 17 years old to apply and provide the following information:
- At least one form of photographic ID such as your driving licence or passport.
- A proof of your current address that could include a utility bill, bank account or credit card statement.
- Proof that you're actually a student. An NUS card, a university offer letter or your 16-digit UCAS status code should suffice.
- Your address where you're staying during term-time.
- The university address, course name together with the start and end term dates.
Bank Account Details
For more information on each bank account mentioned above please visit the following pages for the complete low down.
- Abbey student bank account
- Barclays student bank account
- Halifax student bank account
- HSBC student bank account
- Lloyds TSB student bank account
- Natwest student bank account
- Santander student bank account
Don't be enticed by short term offers as it's the long term you need to worry about when choosing the best student bank account for your requirements.
Try and Budget to Save Money
As course fees and standard student loans are expensive, you may want to use the 0% overdraft facilities straight away. That should see you saving a few hundred pounds per year.
Check your online statement on a regular basis and ensure there's no strange transactions appearing on your account.
It's best to allow yourself a weekly budget to spend at the student bar or other recreational activities to keep your as spending low as possible.
Another top tip is for when you receive any student loans. Either place them immediately into a high earning ISA or into Premium Bonds. You always get instant access to your money if you need it but it's at least earning some interest while you don't require the funds.
The switch guarantee means banks move your account over to them, including all direct debits and standing orders, within seven days.