Breaking Down Student Bank Accounts: Which One Is The Best?
(Disclaimer: I am not a financial expert. I have collated this information from various sources on the internet, and am sharing it here so people have a better idea of their options when opening a student bank account. Always make sure to do your own research as well.)
Before you head off to uni, or even in your first couple of months, you might be told to consider opening a student bank account. Whilst initially this might seem a bit unnecessary - especially if you've already got a current account open with a bank - student bank accounts offer a few perks geared up specifically towards students that current accounts don't typically offer.
These include 0% overdrafts, which allow you to spend more than you've actually got in your account up to a set amount (for first-years, this can range from £500-£1,500), and sometimes a free perk or two - Santander are well known for offering a free four-year Railcard with their student account, whilst HSBC and Nationwide offer a free £100 in cash.
Ideally, try and open your student bank account as soon as possible, as many banks only allow these accounts to be opened in your first year. If you're a second year student who didn't open one in your first year, you may still be able to switch your current bank account to a student account depending on the bank you use - namely NatWest, RBS and HSBC.
So what makes a good student bank account?
Most student bank accounts offer similar services, so one metric of choosing which one works best for you is basing it on how large the overdraft is. Whilst you may not always need a massive overdraft, it's better to have it available in case of emergencies or unforeseen circumstances; and the larger the overdraft, the less likely you are to hit the maximum.
Santander
Santander offers a guaranteed £1,500 0% overdraft for your first three years, increasing to £1,800 in Year 4 and £2,000 in your final year if you're a student on a 5 year course. They also offer a free four-year 16-25 Railcard, worth £100, which gets you a third off most rail tickets. This is great if you're a home student who plans to visit their family frequently, as it can save you a small fortune in train fares throughout your time at university.
NatWest/RBS
NatWest/RBS offer a guaranteed £500 0% overdraft in your first term, with the ability for it to be increased to £2,000 after your first term and later £3,250 (subject to approval). They offer £100 cash within 10 working days of opening the account, as well as a four-year Tastecard - not bad if you enjoy eating out!
HSBC
HSBC's Student Account guarantees a 0% overdraft of £1,000 in your first year, with the option to increase to £2,000 in Year 2 and £3,000 in Year 3 depending on your credit record. They'll also give you a one-year Headspace subscription and a free £100 cash, as long as your debit card is used 5+ times within 30 days of opening the account.
Now, I'll admit - one of the lesser talked about perks of HSBC's Student Account is its Student Credit Card. If you're someone who has a good financial head on your shoulders and wants to start building a credit history, this can be a great idea. However, know that this is a credit card and you WILL be charged APR at 18.9% - no 0% interest here - and the credit limit is £500. On top of your overdraft, this is pretty generous. But as I said, really only consider this option if you know you can make quick repayments on any purchases you put on this Credit Card. You do not want to be getting yourself into any serious debt with high interest rates at this stage in your finances.
Nationwide
Similar to HSBC, Nationwide guarantees a £1,000 overdraft in your first year at 0%, with the option of bumping it up further in your course. They ALSO offer a free £100 cash, but you have to pay in £500 by the 15th December 2023. This won't be too hard if this is the account where your student loan comes in, as you should hit that with your first maintenance loan payment.
Barclays
Similar to NatWest, Barclays offer a £500 0% overdraft in your first term - however, this increases to £1,000 after your first term, and £1,500 once you hit your second year. Their perk is a one-year subscription to Perlego, which offers a library of online textbooks. Not bad at all if it saves you a bit on expensive course materials!
Other banks which offer student bank accounts include Co-Op, Lloyds, Bank of Scotland, Halifax, TSB and Ulster - however, they either have equal/lesser overdrafts to the ones mentioned above, or they don't offer many useful student perks. They still offer decent student bank accounts, however, so don't fully discount them if you're already with them as a provider.
In terms of which is the best - honestly, that's up to you. Santander remains the extremely popular choice, primarily because that £1,500 guaranteed overdraft in the first year and beyond is good. However, there are other factors - maybe your university town only has one of these banks nearby, and it would make sense to go with them in case you ever run into any issues and need to sit down with a human face-to-face. Personally, I went with HSBC, because I knew I could meet the repayments on the Student Credit Card and didn't need a particularly large overdraft. The most important thing to consider is your personal wants and circumstances.
Finally, remember that to open a student bank account, you'll need proof of address, proof of identity and either your UCAS code or a confirmation of study letter.
Hope this was helpful - if you're already at uni, which student bank did you end up going with, and why?
- Eve (Kingston Rep).
Before you head off to uni, or even in your first couple of months, you might be told to consider opening a student bank account. Whilst initially this might seem a bit unnecessary - especially if you've already got a current account open with a bank - student bank accounts offer a few perks geared up specifically towards students that current accounts don't typically offer.
These include 0% overdrafts, which allow you to spend more than you've actually got in your account up to a set amount (for first-years, this can range from £500-£1,500), and sometimes a free perk or two - Santander are well known for offering a free four-year Railcard with their student account, whilst HSBC and Nationwide offer a free £100 in cash.
Ideally, try and open your student bank account as soon as possible, as many banks only allow these accounts to be opened in your first year. If you're a second year student who didn't open one in your first year, you may still be able to switch your current bank account to a student account depending on the bank you use - namely NatWest, RBS and HSBC.
So what makes a good student bank account?
Most student bank accounts offer similar services, so one metric of choosing which one works best for you is basing it on how large the overdraft is. Whilst you may not always need a massive overdraft, it's better to have it available in case of emergencies or unforeseen circumstances; and the larger the overdraft, the less likely you are to hit the maximum.
Santander
Santander offers a guaranteed £1,500 0% overdraft for your first three years, increasing to £1,800 in Year 4 and £2,000 in your final year if you're a student on a 5 year course. They also offer a free four-year 16-25 Railcard, worth £100, which gets you a third off most rail tickets. This is great if you're a home student who plans to visit their family frequently, as it can save you a small fortune in train fares throughout your time at university.
NatWest/RBS
NatWest/RBS offer a guaranteed £500 0% overdraft in your first term, with the ability for it to be increased to £2,000 after your first term and later £3,250 (subject to approval). They offer £100 cash within 10 working days of opening the account, as well as a four-year Tastecard - not bad if you enjoy eating out!
HSBC
HSBC's Student Account guarantees a 0% overdraft of £1,000 in your first year, with the option to increase to £2,000 in Year 2 and £3,000 in Year 3 depending on your credit record. They'll also give you a one-year Headspace subscription and a free £100 cash, as long as your debit card is used 5+ times within 30 days of opening the account.
Now, I'll admit - one of the lesser talked about perks of HSBC's Student Account is its Student Credit Card. If you're someone who has a good financial head on your shoulders and wants to start building a credit history, this can be a great idea. However, know that this is a credit card and you WILL be charged APR at 18.9% - no 0% interest here - and the credit limit is £500. On top of your overdraft, this is pretty generous. But as I said, really only consider this option if you know you can make quick repayments on any purchases you put on this Credit Card. You do not want to be getting yourself into any serious debt with high interest rates at this stage in your finances.
Nationwide
Similar to HSBC, Nationwide guarantees a £1,000 overdraft in your first year at 0%, with the option of bumping it up further in your course. They ALSO offer a free £100 cash, but you have to pay in £500 by the 15th December 2023. This won't be too hard if this is the account where your student loan comes in, as you should hit that with your first maintenance loan payment.
Barclays
Similar to NatWest, Barclays offer a £500 0% overdraft in your first term - however, this increases to £1,000 after your first term, and £1,500 once you hit your second year. Their perk is a one-year subscription to Perlego, which offers a library of online textbooks. Not bad at all if it saves you a bit on expensive course materials!
Other banks which offer student bank accounts include Co-Op, Lloyds, Bank of Scotland, Halifax, TSB and Ulster - however, they either have equal/lesser overdrafts to the ones mentioned above, or they don't offer many useful student perks. They still offer decent student bank accounts, however, so don't fully discount them if you're already with them as a provider.
In terms of which is the best - honestly, that's up to you. Santander remains the extremely popular choice, primarily because that £1,500 guaranteed overdraft in the first year and beyond is good. However, there are other factors - maybe your university town only has one of these banks nearby, and it would make sense to go with them in case you ever run into any issues and need to sit down with a human face-to-face. Personally, I went with HSBC, because I knew I could meet the repayments on the Student Credit Card and didn't need a particularly large overdraft. The most important thing to consider is your personal wants and circumstances.
Finally, remember that to open a student bank account, you'll need proof of address, proof of identity and either your UCAS code or a confirmation of study letter.
Hope this was helpful - if you're already at uni, which student bank did you end up going with, and why?
- Eve (Kingston Rep).
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