The Student Room and NatWest's guide to your student money

When it comes to managing your money at uni, a little advice is always handy.

We put your student money questions to NatWest's head of student accounts
We put some of your student money questions - along with a selection of the most common queries on our money forum - to Alison Cruse, NatWest's head of student banking. Here's what she had to say...

How do I pick the right student bank account?

“Student bank accounts vary a lot in terms of what they offer, so it's worth comparing them.

“One feature that can be important for students is an interest-free overdraft that you can use without being charged, as long as you stay within your agreed limit.

“Banks often offer little extras too, which might save you money or give you the occasional treat. NatWest gives away a free tastecard that gets you 50% off or two-for-one at selected restaurants across the country – always handy for the nights you don't fancy cooking.”

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For more info, see our article on student bank accounts.

What's the deal with student overdrafts, and why are none of the banks offering a guaranteed overdraft? (question asked by The_Jakal)

“An overdraft is money that's available to you on top of anything you put into an account. So, if you put £1,000 into an account and you have a £500 overdraft, you actually have £1,500 available.

“Some overdrafts are interest-free, but not all of them. That means you can be charged for using them, so make sure you know what sort you have and know what your limit is! Also, when you graduate you'll need to start paying back your overdraft, if you've used it – different banks have different terms and conditions for this.

“To get a larger or different overdraft you'll need to speak directly to your bank. What you're entitled to will depend on your personal circumstances as well as your credit history; with any bank, a poor credit history might mean you won't get an overdraft (see below for more about credit histories).”

“Banks no longer offer guaranteed overdrafts on student accounts because as responsible lenders, we need to know that our customers can repay or manage their debts. That's why we assess people to make sure they're safe to lend money to, for their sake as well as ours. Overdrafts are only available to over 18s.”

How important is my credit history?

“Your credit rating or credit history is like a financial report card. Basically, it tells banks and businesses how careful you are with your money.Your credit history tells banks and businesses how careful you are with your money

“In practical terms this affects things like getting a phone contract or arranging a new overdraft. If your credit rating is good, you're more likely to be successful. If it's not so good, you might have problems.

“Staying in control of your finances will have a positive impact on your credit rating. Things like paying your bills on time, keeping up with direct debits or standing orders and not using an unauthorised overdraft can all look good on that financial report card.”

How do I set up a student account and what will happen to it after I graduate? (question asked by OU Student)

“Setting up a student account is easy, you just need to have the right documentation. Every bank has its own way of getting you started, but you'll find all the information you need on their website, including details of how and where to apply.

“Once you leave university you'll move onto a graduate bank account and most financial institutions will start reducing your interest-free overdraft. This doesn't necessarily mean your overdraft limit will change - just the part of it that you can use without being charged.

“At NatWest, we offer an overdraft of up to £2,000 interest-free in your first year after graduation; the interest-free allowance reduces to £1,000 in your second year. In your third year after graduation we'll move you onto Select, which is our standard full bank account.

“Graduate accounts can still offer benefits. From 6 November 2013 our Graduate account will offer a tastecard, so you'll still be able to take advantage of some tasty perks when you leave uni.”

Who can have a student account and what do they need?

"Because they're flexible and can offer some useful perks, a student account would be appealing to anyone – but they're just for students! To qualify for the NatWest student bank account, first of all you'll need to have been living in the UK for the last three years or more.

"In terms of your studies, you'll need to either be on a full-time undergraduate course lasting at least two years, a full-time postgrad course or be training as a nurse. You'll also need to be enrolled at a UK uni or college of higher education and you'll have to prove that to your bank – they'll be able to tell you what information they need."

Can I have more than one student bank account? Having several interest-free overdrafts would definitely be handy! (question asked by senor_brightside)

“Generally, the aim is for you to just have one student account. We specify that you must use your NatWest Student Account as your main account (ie you have to pay into and out of it) to benefit from the overdraft and other perks. I suspect other banks will have similar rules!”

What are the benefits of a student credit card? (question asked by RightSaidJames)

“With a credit card, your bank covers the cost of any item you buy on it, rather than taking it out of your account as they do with a debit card. You then pay the outstanding amount back when you're billed, which is usually monthly. It's a different arrangement to a student overdraft, which generally offers access to larger amounts of money that – if the overdraft is interest-free - you don’t need to pay for during the period of your overdraft agreement.Credit cards can be useful, but they do need to be used responsibly

“Credit cards need to be used responsibly. Because the amount of interest paid on credit cards tends to be higher than on loans and overdrafts, it's best to avoid having outstanding debt on your card for long. The NatWest student credit card has a limit of £500, to help you avoid overspending.

“There are interest-free credit cards on the market, but these are generally available only to those with strong credit history. If you pay your balance (and your previous month's balance) in full and on time each month, you'll enjoy a period of time with interest-free credit on all purchases. The length of time (often 56 days) will depend on your credit card provider.”

“Student credit cards do have their uses: they can cover unexpected costs or help you manage your budget if you're a little short at the end of the month. However, because they tend to charge higher rates of interest and give you access to smaller amounts of money than your overdraft, it's best to use them sparingly.”

How can I keep track of my money?

"A great way to keep tabs on your money is to work out a budget. Your university can often help with this, or you can use the budget planning tool on the NatWest website to keep an eye on what's coming in and what's going out on rent, bills and so on. That way you'll always know what's left over for the fun stuff.

"Banks offer lots of tools to help you manage your account. NatWest's mobile banking app lets you check your balance, make payments and even get cash from NatWest, RBS or Tesco ATMs using the Get Cash service. Don't forget online and phone services: NatWest offers online banking and 24-hour UK call centres."

For more budgeting advice see our article here.

How can I get better at saving money?

"Again, working out and sticking to a budget is a great way to make your money go further. There are lots of other ways though – using your NUS card or any offers from your student account (like NatWest's tastecard) can get you big discounts, for example.

"Shopping and eating smart is another easy way to keep those pounds in your pocket. Buying own brands, shopping with your friends to spread the costs and cooking for yourself can all make a big difference. Don't forget to get help and advice from your bank or student union if you need it, and read our articles on money saving advice here on The Student Room."

"Students often think that they'll be too busy being penniless to save any money. It can certainly be hard to find spare funds, true, but if you can put a little aside every now and then it might come in handy in an emergency. Or you could save up for something important!

What about putting money aside? Is there any point getting a savings account? (question asked by paddyman4)

“Using a savings account can be an effective way to save. Your money earns more interest that way, and it's in a separate place so you won't spend it accidentally. You might want to make sure you can get hold of your money easily in case you need it quickly.”Using a savings account can be an effective way to put away a few pounds so you won't spend it accidentally

“It's true that many banks' savings accounts offer interest rates lower than the rate of inflation at the moment. Only some fixed term accounts, where you can't access your money for the duration of the term (often several years), offer higher rates.

“However, savings accounts do offer interest rates higher than those available on student or graduate accounts so they're worth investigating. Once again, it's important to have money available for emergencies, large purchases or for longer-term financial planning and a savings account can be useful for that.”

Is there anything I can do to get better at looking after my money before I go to uni? (question asked by Peaches & Cream)

“If you're aged 16-18 and thinking about going to university you can prepare for the money management side of things by getting into some good habits. You might not have a lot of income, but if you practice things like budgeting and getting your head around household costs now, you'll be more than ready when Freshers' Week comes around.

“If you'd like to start saving early, perhaps for big purchases or to get a uni fund going, think about getting a holiday job to earn some extra money. And don't forget to keep track of your earnings – check your balance online, with a Mobile Banking App or at an ATM. It's better to know what's in your account than be in the dark and risk running out of money.”

For more information on handling your money while you're at uni, take a look at our student money section, brought to you in association with NatWest.

NatWest Mobile App available on selected smartphones, to NatWest personal current account holders with a debit card, online banking and UK mobile number.

Get Cash limits will apply for this service, including a maximum withdrawal limit of £250 per day. The amount requested must be within the daily withdrawal limit for your debit card. You must have at least £25 available funds to withdraw from your account (including any overdraft facility).

Customers need to register for online banking and paperless statements in order to receive the tastecard membership.