Follow this topicNational Student Money Week: the best student bank accounts
With 450,000 students set to head off to university later this year, we've highlighted the top bank accounts specifically for students.
One of the first things students need to do to get their financial life started is to compare student bank accounts before choosing the ideal account to suit their own, personal needs.
Given that most students will spend much of their degree courses 'in the red', the first thing to look for in a student bank account is a generous interest-free overdraft. The best accounts offer fee-free, interest-free overdrafts of up to £3,000. However, this upper limit usually applies only to year three, so it starts off lower and then rises with each academic year.
Also, you must understand that you may not get the maximum overdraft advertised, as your individual limit will be based on your credit score. However, some banks do guarantee to give you this upper limit, so always check whether the overdraft limit on offer with the student bank account is 'guaranteed' or only 'up to'.
In addition, don't be tempted to exceed your overdraft limit without permission. Remember, it's a limit, not a target – and you must pay back all this borrowed money one day. If you do go overdrawn without permission, then you could be charged sky-high rates of interest, plus painful penalties of up to £30 per transaction on top.
After 0% overdrafts, the next features to consider are credit interest rates (how much you'll be paid when your balance is above zero) and freebies, gifts and other incentives. Also, convenience does play a part, with many students signing up to banks which have branches or cash dispensers on campus.
The latest student deals
All of the UK's leading banks have now released details of their student bank accounts. Here's what's on offer to students today (banks listed in A-Z order):
|
Account |
Credit interest |
0% overdraft |
Authorised overdraft |
Incentives |
|
Bank of Scotland Student |
None |
Year 1 - up to £1,500 (tiered) Year 2 - up to £1,500 Year 3 - up to £1,500 Year 4 - up to £2,000 Year 5+ - up to £2,000 |
8.21%, plus £6 monthly usage fee if £10 buffer exceeded |
|
|
None |
Year 1 – up to £2,000 Year 2 – up to £2,000 Year 3 – up to £2,000 Year 4 – up to £2,000 Year 5 – up to £2,000 |
8.9% |
10% discount on student travel insurance. |
|
|
Clydesdale Bank Student Account |
None |
None |
Year 1 – 7.49% (up to £1,000) Year 2 + - 7.49% (up to £3,000) |
Specialist advice service |
| First Trust Bank | None | Up to £1,850 | N/A | Commission-free foreign currency. |
|
Halifax Student |
0.10% |
Year 1 – up to £3,000 (£1,000 formal overdraft limit agreed at account opening) Year 2 – up to £3,000 Year 3 – up to £3,000 Year 4 – up to £3,000 Year 5 – up to £3,000 |
7.2% |
Discounts on breakdown cover and commission-free traveller's cheques and currency |
|
2.0% for first year (tracks base rate + 1.5%) on up to £1,000 |
Year 1 onwards - up to £3,000. £500 formal overdraft limit agreed at account opening. |
N/A |
Commission-free traveller's cheques and currency. |
|
|
None |
Year 1 - up to £1,500 (tiered) Year 2 - up to £1,500 Year 3 - up to £1,500 Year 4 - up to £2,000 Year 5 - up to £2,000 Year 6 - up to £2,000 |
8.21%, plus £6monthly usage fee if £10 buffer exceeded |
|
|
|
NatWest Student |
None |
Year 1 – up to £1,000 (tiered) Year 2 – up to £1,250 Year 3 – up to £1,500 Year 4 – up to £1,750 Year 5 – up to £2,000 |
N/A |
|
|
Royal Bank of Scotland Student Royalties |
None |
Year 1 – up to £1,000 (tiered) Year 2 – up to £1,250 Year 3 – up to £1,500 Year 4 – up to £1,750 Year 5 – up to £2,000 |
N/A |
|
|
Santander Student Current Account |
1% on up to £500 |
Year 1 - £1,500 Year 2 - £1,500 Year 3 - £1,500 Year 4 - £1,800 Year 5 - £2,000 |
N/A |
|
|
Smile Student Account |
None |
Year 1 - £1,400 Year 2 - £1,700 Year 3 - £2,000 |
9.9% |
|
|
The Co-operative Bank Student |
None |
Year 1 - £1,400 Year 2 - £1,700 Year 3 - £2,000 |
9.9% |
|
|
Yorkshire Bank Student Account |
None |
None |
Year 1 – 7.49% (up to £1,000) Year 2 + - 7.49% (up to £3,000) |
Specialist advice service |
These deals could be altered at short notice.
Looking at this list, I can't see any really fantastic, stand-out deals on offer for students.
Nevertheless, you can see that some student accounts are better than others. For example, students should avoid Clydesdale Bank and Yorkshire Bank, as these don't offer interest-free overdrafts. Also, seven banks – Bank of Scotland, Barclays, Halifax, HSBC, Lloyds TSB, NatWest and RBS – only offer 'up to' maximum overdraft limits, so you may not qualify for these upper limits. Of these, HSBC and Halifax have the highest potential limit of £3,000.
Finally, signing up to one bank's student account does not mean that you have to stick with it for life. You can switch student accounts from one year to the next, as well as moving to a top graduate account once you've got your degree.
This article has been updated since it was first published
More on student finance
Compare student bank accounts
Money saving tips for students
Is a £3,000 student overdraft a good idea?
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