The best student bank accounts 2020/21

Updated on 11 September 2020 | 0 Comments

If you're off to university, here are the top bank accounts designed for students in terms of highest in-credit rates, cheapest overdrafts and best perks.

Getting a decent student bank account should be a top priority, no matter what stage of study you’re at.

Here we explain what you should look out for when comparing bank accounts and round up some of the best deals on offer right now.

What to look for in a student bank account

As many students will spend at least part of their time at university ‘in the red’, a vital thing to look for in a student bank account is a decent interest-free overdraft.

The best accounts currently offer fee-free and interest-free overdrafts of up to £3,000.

But this upper limit usually only applies to those in their third year (or year four and above if your degree is longer), so it starts off lower and rises with each academic year.

Also, you may not get the maximum overdraft advertised, as your individual limit will be based on your credit score.

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.’

Don't be tempted to exceed your overdraft limit without permission. And to state the obvious, it's a limit, not a target, as you must pay back all this borrowed money one day.

If you do go overdrawn without permission, you could be charged extortionate rates of interest for some student bank accounts, while others won’t charge you anything at all.

After 0% overdrafts, the next feature to consider is credit interest rates (how much you'll be paid when your balance is above zero), as well as freebies, gifts and other incentives.

Convenience also plays a part. Many students may sign up to banks that have branches or cash points on campus, but with internet and mobile banking now so prevalent, this is arguably less important.

Top student bank account picks

At the time of writing, Barclays offers one of the highest 0% overdraft limits (alongside Nationwide and HSBC) and access to various discounts, as well as a free 12-month subscription to online library Perlego.

Other bank accounts pay a little interest like Santander’s 123 Student Account, but this account also has a lower interest-free overdraft limit.

The table below reveals what's on offer to students today. We've included any credit interest rate, free overdraft limit and incentives, but please bear in mind that these may not be the most important factors for you.

Consider your personal needs – specifically your spending and savings habits – before applying.

If you feel you may need access to extra cash, a fee-free overdraft may be more important. On the flip side, if you have extra cash to put aside, a decent interest rate may be at the top of your checklist.

It’s important to make sure you’re not swayed by incentives alone, as these accounts may include less attractive overdrafts with potentially high interest outside of your 0% limit.






Overdraft interest rate (over fee-free limit)


Barclays Student Additions Account


First term – up to £500, rest of first year – up to £1,000

Year 2 – up to £2,000

Year 3 and beyond – up to £3,000


Free 12-month subscription to online library Perlego

Access to cashback scheme

Personalised debit card

Santander 123 Student Current Account

1% on balances of up to £2,000

Years 1-3 - £1,500*

Year 4 - £1,800

Year 5 - £2,000


Free 16-25 railcard offering a third off UK rail travel (you must register for online banking).

Access to Retailer Offers

Halifax Student Current Account


Up to £1,500

39.9% EAR on overdrafts of over £1,500

Earn up to 15% cashback (you need to register for online banking and activate Cashback Extras).

Access to Save the Change 

NatWest/Royal Bank of Scotland Student Account


Up to £2,000 after first term (£500 in the first term)



**Choose from a free:

National Express Coach Card offering a third off coach travel for four years;

Amazon Prime Student membership for one year or;

 Tastecard for four years

HSBC Student Bank Account


Year 1 – at least £1,000 (guaranteed)***

Year 2 – up to £2,000

Year 3 – up to £3,000



Nationwide FlexStudent Account


Year 1 – £1,000 (guaranteed)*

Year 2 – £2,000

Year 3 – £3,000



TSB Student Bank Account

5% on balances of up to £500

Over 10 months on university course - up to £1,500 (up to £500/£1,000 before this)

 39.90% EAR on overdrafts of over £1,500


Lloyds Bank Student Current Account


Tiered – up to £1,500 in years 1-3 (lower limit in first 10 months)

Years 4-6 - up to £2,000

39.90% EAR (over fee-free overdraft limit)

Up to 15% cashback via scheme Everyday Offers.

Access to Save the Change

Free TOTUM card****

Bank of Scotland Student Account


Years 1-3 – up to £1,500

Years 4-6 – up to £2,000

39.90% EAR (over fee-free overdraft limit)

Up to 15% cashback via scheme Everyday Offers.

Free TOTUM card****

*You need to pay in at least £500 per term, maintain a good credit record and stay within your limit to keep your arranged overdraft.

** You must register for online banking and choose to receive paperless statements.

***You must make regular credits into your account to keep any arranged overdraft.

****If you open your account by 31 October 2020.

Bear in mind that these deals could be altered at short notice

Where are the challenger banks?

You may be wondering why Monzo, Starling or Revolut haven't been included in our roundup. 

Although these banks have great mobile apps, and advantages for frequent travellers, they don't currently offer interest-free overdrafts, or any of the perks mentioned above.

There is, however, nothing stopping you from having two bank accounts and transferring money between them if you want the perks of different accounts.

Feel free to move

Finally, remember that 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 move to a top graduate account once you've got your degree.

Need a graduate current account instead? Take a look at our roundup of the best graduate current accounts. Or, if you're looking for unusual ways to make cash, get some ideas at Students: 10 quirky ways to make money and boost your CV.


Be the first to comment

Do you want to comment on this article? You need to be signed in for this feature

Copyright © All rights reserved.