Everything you need to know about student bank accounts

Got into uni and now need to get your finances in check? Check out our guide for everything you need to know about student bank accounts

Student bank accounts

Why should you get a student bank account?

If you already have a bank account, you may not think you should bother with a student one. The main difference is the interest-free overdraft. This is probably one of the only times you’ll ever get this so it’s worth taking advantage! As a student, you're probably going to need one, so go large and get the biggest interest-free one you can find – it will give you financial breathing space, which is never a bad thing.

That said, don’t forget that some banks are more likely than others to dish out their maximum overdrafts, so you might want to choose an account where there’s a better chance of getting the full amount even if it’s not the highest advertised on the market.  TSR’s money forum is a good place to do your research into this.

It’s a good idea to open a student account before you start university, especially if you are applying for a student loan as the money will be paid directly into your bank account and it can be a drag to change accounts when you’re juggling your studying with a hangover. Check the small print.  You’re going to want to know about any charges for going over your overdraft limit before it happens.


What banks are offering (2017)

What bank should you go with this year? Take a look at what the major UK banks are offering with their students:


Barclays

 

Barclays

  • £500 interest free overdraft upon opening the account
  • Up to £2,000 interest free overdraft by second year
  • Up to £3,000 interest free in third year and beyond
  • Cashback, Apple Pay and Pingit
  • Online and mobile banking through downloading the smartphone app: “Barclays Mobile Banking”
  • Free SMS text alerts
  • Graduate account also available
Halifax

 

Halifax

  • An interest-free planned overdraft for the length of your course plus an extra year after you graduate, up to a maximum of 6 years. ( Note: The amount you get is dependent on your circumstances and you must be a UK resident)
  • Contactless payments
  • Online and mobile banking (through the Halifax app)
  • Free SMS text alerts
  • Cashback when you spend once registered for Online Banking and you've activated Cashback Extras
  •  Monthly credit interest on any credit balance 0.10% AER (0.10% gross) variable.
HSBC

 

HSBC

  • Automatic overdraft of £500, up to £3,000 overdraft & no overdraft fees
  • Student Credit Card (Subject to status)
  • Online and mobile Banking
  • Free SMS text alerts
  • Paym service available, allowing you to pay friends with just their phone number
  • Contactless payments
  • Graduate account also available
Lloyds

 

Lloyds Bank

  • Interest free Overdraft of up to £1,500 in years 1-3 and up to £2,000 in years 4-6
  • Mobile banking through their app
  • Online banking
  • Free SMS alerts
  • Get up to 15% cashback using Everyday Offers at the type of places you regularly shop
  • Contactless 
  • Graduate account also available (only if you get the student account first)
NatWest

NatWest

  • Up to £500 overdraft in first term, and up to £2000 after that (subject to you depositing at least £750 every six months and making at least three debit transactions every month)
  • NatWest also has an International Student account available, similar terms to the regular student account, however without the overdraft.
  • Student credit card available, with up to £500 credit
  • Free National Express Young Persons Coachcard, valid for 4 years, giving you 1/3 off coach fares in the UK, fares to some European cities and 10% off some festivals.
  • Online banking and cash withdrawals through mobile banking
  • Paym service available, allowing you to pay friends with just their phone number
  • Emergency cash up to £300 if your card is lost or stolen
  • Free SMS alerts
  • Graduate account also available
RBS

RBS

  • Interest free overdraft up to £500 first term, rising up to £2000 after first term (you must pay in at least £750 every six months and make at least 3 debit transactions each month) 
  • RBS also has an International Student account available, similar terms to the regular student account, however without the overdraft.
  • Free National Express Young Persons Coachcard, valid for 4 years, giving you 1/3 off coach fares in the UK, fares to some European cities and 10% off some festivals (if you sign up for paperless statements and online banking)
  • Free SMS alerts
  • Online and mobile banking through their app
  • Graduate account also available
Santander

Santander

  • Santander is offering a lucrative 16-25 railcard for this year's freshers
  • Free four-year 16-25 Railcard when you open a new account (provided you pay in £500 a term)
  • £1,500 interest-free overdraft, increasing to a maximum of £2,000 in year five (provided you deposit £500 into your account each term)
  • Only interest free overdraft if arranged. If not already arranged then a £5 fee will apply daily!
  • Continuing interest-free overdraft after graduation with a 'Graduate Account', postgraduate and international student account also available.
  • 3% interest paid to you on balances from £300 up to a maximum of £2,000.
  • Online and mobile banking
  • Free SMS alerts

Co-operative bank

  • This account is no longer available to new or existing customers, however if you have an existing student account with Co-op, the benefits still apply.
TSB

TSB

  • Up to £500 overdraft for the first six months, you can apply to increase it up to £1,000 in months seven to nine. From month 10 you can increase it up to £1,500.
  • Interest and fee-free untiered Planned Overdraft of up to £1,500 in years two and three (and in years four, five and six if your course is up to six years in length).
  • 5% interest on balances up to £500
  • Free £10 overdraft buffer
  • Student Credit Card available
  • Apple Pay and Android Pay are available with this account.
  • Online and mobile banking
  • Free SMS alerts
  • Graduate account also available
nationwide

Nationwide

  • Up to £1000 overdraft in first year, which you can apply to increase in second year to £2000 and to £3000 in third year.
  • You must pay in at least £1,500 per year of study across two or more transactions (this could be your student loan or money from family, jobs etc…)
  • Earn 1% interest on balance up to £1000
  • Cashback with Simply Rewards, meaning you get money back from shopping with certain brands
  • Mobile and online banking
  • Apple and Android contactless payments
  • Free SMS alerts
  • Graduate account also available
student bank account

What you need to open an account

So you picked a bank, now all you got to do is remember to take the following to set it up:

  • A copy of your student loan financial assessment form
  • Proof that you are in fact a student (usually the AS12 letter from UCAS)
  • Photographic identification, e.g., passport, full driving license. Overseas students should produce their passport and letter of admission or enrolment from the university
  • Proof of term-time or home address. This should be an official document e.g. bank statement, utility bill.
  • Remember that if you are opening your student account from your uni halls or house, your driving license will not be able to be used as proof of address unless you change the address from your home one.

Things to think about

Overdraft facilities:

  • Find out what happens if you exceed your overdraft limit.
  • Always consult with your bank before going overdrawn outside of any pre-agreed limit, as banks often charge you a lot for unauthorised overdrafts.
  • Remember the bank may describe your overdraft as 'free' but you still have to pay it back so use it carefully. For example, you’re given an agreed overdraft limit of £1,000 in your first year, £1,250 in your second year and £1,500 in your third year, but this does not mean you will be allowed £3,750 in total.

General things to know:

  • If you want to check out the difference between a credit and debit card, check out this link.
  • Check out how far your branch is from your uni/ accommodation
  • Find out where local ATMS’S are so you can get cash when needed
  • Look into whether your bank has a student advisor you can chat to about your financial situation. You may need to have a meeting with one before your overdraft is arranged.
  • Find out if your branch offers good deals to graduating students, many banks do and these include cheaper overdrafts and possibly loans.
  • Does the bank charge for their services?
  • Will you get interest on credit balances?
  • Does it charge commission on travel money? (several banks do not charge students)

 

 

If you get into trouble

Whichever bank you choose, remember that you may need their help if you have money troubles later on, and they’ll likely offer you as much support as they can. If you are ever in financial difficulty it is a good idea to contact the bank and discuss it with them.  Check out these tips for taming your overdraft.


If you are having money problems, remember these steps:

  • Let your bank know as soon as possible. They may be able to help.
  • If you are in severe financial difficulty you can apply for Access Funds and hardship loans. Check with your college for details.
  • You can get free confidential professional money advice from the National Debtline on 0808 808 4000 or from the Consumer Credit Counselling Service on 0800 138 1111.

 

Are you going to uni this year? Check out eight things that will happen to you in Freshers Week.

Confused about what to take? 
Read our ultimate list of things to pack.

 

Find out all you need to know about Freshers Week here.

 

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