Choosing the Best Student Bank Account
Choosing the best student bank account
Managing your finances whilst at university is not always easy, this is why choosing your student bank account is important. Having a bank account tailored to students will help you to manage your money and have flexible access as well an overdraft where you can spend more than you have, when necessary without the worry of interest.
Why Open a Student Bank Account?
Student bank accounts are tailored to help you manage your finances while you focus on your studies. Unlike standard accounts, student accounts often come with benefits such as interest-free overdrafts, which can be a lifeline when you’re waiting for your next student loan instalment. These accounts typically convert to graduate accounts after you finish your studies, allowing you to retain your 0% overdraft for an additional year, giving you time to pay off any outstanding balance before interest is applied.
Some banks will offer incentive rewards such as cashback or vouchers, some of the perks of being a student is all the discounts on offer.
An interest free overdraft means you can borrow money up to a certain limit, set by the bank without having to pay interest on top. This can help when having to pay for rent, groceries or books even if you are low on funds that month. It is important to use this feature wisely, as whilst it is helpful, this can affect your finances later down the line and lead you to mismanage your finances.
If you still owe the bank a year after you finish university they will begin charging you as well as adding interest.
What You Need to Open a Student Bank Account
To open a student bank account, you will typically need to provide proof of your student status. This could include an ID, UCAS confirmation code, or a confirmation letter from your university indicating that you are enrolled. Most student bank accounts require you to be over 18, so be sure to check the eligibility criteria before applying.
How to Choose the Right Bank Account
While the initial sign-up incentives and rewards can be attractive, it’s crucial to consider the long-term benefits of the account. Look for an account that offers a generous and flexible interest-free overdraft, as this will be more valuable than one-time offers in the long run. Additionally, consider the ease of account management, customer service, and whether the bank has branches near your university. Choosing the right bank account can make saving as a student simpler.
Before making your decision, compare different accounts and read the fine print to ensure you understand the terms and conditions, particularly regarding the overdraft. Your student bank account is likely to be your primary financial tool during your studies, so choose one that will support you throughout your university journey.
Top Student Bank Accounts for 2024
Each of these bank account offer a 0% interest overdraft. Take a look at our 4 picks.
Santander Edge Student Account
The Santander Edge student account offers a 0% interest overdraft for up to four years. In years 1-3, the overdraft is capped at £1,500, provided you deposit at least £500 every four months. This aligns well with the typical schedule of student loan payments. If you continue your studies into a fourth year, the overdraft limit increases to £1,800, and it reaches £2,000 in the fifth year.
An added perk is the free 16-25 Railcard, which offers a third off train fares—perfect for students who plan to travel home frequently or explore the UK during their studies. This account is available to first-year university students and level 4-7 apprentices.
NatWest Student Account
NatWest’s student account starts with a £500 overdraft in the first term, which then increases to £2,000 by your third year. The account comes with appealing incentives, including £100 cashback and a four-year Tastecard membership, giving you discounts at various restaurants and entertainment venues. To be eligible, you must be over 18.
Lloyds Student Account
Lloyds offers a straightforward student account with a 0% overdraft that starts at £500 for the first six months, then increases to £1,500 for the remainder of the three-year period. If you continue into a fourth year, the overdraft limit rises to £2,000.
Lloyds also provides a £110 sign-up incentive and 2% interest on balances up to £5,000, which can be a nice bonus if you manage to keep your account in credit.
Nationwide FlexStudent Account
Nationwide’s FlexStudent account offers a growing overdraft, starting at £1,000 in the first year and potentially reaching £3,000 by your third year, depending on how well you manage your account. You must deposit £500 each term and maintain a healthy account balance to unlock the full overdraft.
Additionally, Nationwide offers £100 cashback when you deposit the initial £500, plus £10 in Just Eat vouchers each month—ideal for those nights when you need a study break and a takeaway.
