Are you soon going off to university and looking to open a student bank account but have no idea what bank to go with? Don’t fret. You’ve come to the right place. Choosing the best student bank account can be a hassle, but here at The Stay Club, we aim to guide you on your journey to independence. From overdrafts, perks to look out for, and what to avoid – we are going to take you through the basics of having a student account, how to open one and which are the best.
What Is A Student Bank Account?
A student bank account is an account exclusively designed for students. The main feature that makes it a student account is an interest-free overdraft and other freebies to win you over…I mean, there’s nothing better than hearing the word “free”! However, remember to read the terms and conditions carefully so you don’t get caught out.
Why Do You Need a Student Account?
So what’s the big deal? Having your own UK bank account is an important step in becoming an independent adult, so if you don’t already have one, then a student account is a good starting place. It can also make everyday finance much easier such as:
Receiving and paying student finance – especially if you are getting a loan
Direct debits and subscriptions such as the gym and phone contracts
Paying back friends
Getting paid if you decide to work
Online banking will help you monitor your budget
With a student bank account, you get the breathing space of an interest-free overdraft, which can help ease financial stress.
5 Best Student Bank Accounts
Now that we’ve shared tips on how to open a student bank account, here’s a detailed list of the best student bank accounts in the UK. These accounts have some of the best offers and perks, as well as top :
One of the most highly recommended is the Nationwide FlexStudent account. This offers a 0% overdraft & students receive a £1,000 overdraft in year 1, £2,000 in year 2 & £3,000 in year 3. This is the agreed limit as long as you deposit £500 a term and maintain a good credit score.
Key Info:
0% Overdraft
Up to £3,000
Year 1: £1,000
Year 2: £2,000
Year 3: £3,000
Who’s eligible: First-year university students and those who don’t have a student account with another provider.
Incentives: £100 for opening your account and no debit card fees abroad.
Conditions: Be a UK resident for 2 years and pay in at least £500 per academic term
2. HSBC Student Bank Account
The HSBC Student Bank Account offer 0% overdraft and accepted students can receive a £1000 overdraft upon opening an account. This can rise to £3,000 in your third year.
Key info:
0% Overdraft
Up to £3,000
Year 1: £1,000
Year 2: £2,000
Year 3: £3,000
Who’s eligible: University students about to start or in their first year or apprentices who permanently live in the UK.
Incentives: £100 for opening an account.
Conditions: Have lived in the UK for at least 3 years
3. Santander 123 Student Current Account
The Santander 123 Student Current Account offers accepted students and apprentices a 0% overdraft of up to £2,000. Additionally, Santander offers a free four-year Young Person’s Railcard, which saves students one-third of all train travel within the UK. Cheers to all the staycations happening this year.
Key Info:
0% Overdraft
Up to £2,000
Year 1: £1,500
Year 2: £1,500
Year 3: 1,500
Year 4: £1,800
Year 5: £2,000
Who’s eligible: University students about to start or in their first year, or apprentices who permanently live in the UK.
Incentives: Free four-year Young Person’s Railcard
Conditions: Pay in at least £500 per academic term
4. Bank of Scotland
The Bank of Scotland Student Current Account gives full-time students and those in higher education £1500 interest-free overdraft for the first 3 years, which increases to £2000 in years 4-6.
Key info:
0% overdraft
Year 1: £1,500
Year 2: £1,500
Year 3: 1,500
Year 4: £2,000
Year 5: £2,000
Year 6: £2,000
Earn cashback
Who is eligible: If you are 17 or over, in a full-time degree or equivalent education.
Incentives: Up to 15% cashback with Everyday Offers
Conditions: You must have lived in the UK for 3 years and be 18 or over to get an overdraft.
5. Barclays Student Additions Account
The Barclays Student Additions Account offers a 0% overdraft, and upon opening an account, students receive £500 in their first term and can request an increase for the rest of the year.
Key info:
0% Overdraft
Up to £3,000
Year 1: £1,000
Year 2: £2,000
Year 3: £3,000
Who’s eligible: University students about to start or in their first year or apprentices who permanently live in the UK.
Incentives: none
Conditions: Must have lived in the UK for 3 years
Have any questions?
Here are some common questions you may have about having a student account.
1. How old do you need to be to apply for a student bank account?
You need to be 18 years old. If you’re underage, you can open a young person account with many banks but that is a different process.
2. What do I need to open a student account?
Fortunately, you don’t need to do too much, but you do need some official documents:
Photo ID such as a passport or driving license.
Proof of address – this includes documents such as a UK driving license, bank statement, or utility bill. These may be difficult to get if you’re living with your parents or not yet a resident in the UK so look into the specifications when choosing your bank account.
Proof of student status – you can use your acceptance letter or request a proof of enrollment letter from your university.
3. Will I get the maximum overdraft?
Most banks offer their overdraft limits on the condition that they feel you are not a financial risk. This is why they want to see your credit history, and many banks ask for a minimum deposit each term. You’ll need to check the specifics of each account to make sure you meet their requirements.
4. How do you open a student account?
Before, you would have to visit a bank in person, but nowadays, you can usually apply for and open your bank account online. You’ll need to fill out an online application and upload your documents to that.
5. Can you change your student bank account?
It is possible, but if you’re overdrawn in an existing account, you will have another credit check to get a new student bank account.
6. What happens to your student account when you finish Uni?
After you graduate, your student account becomes a graduate account and you’re no longer entitled to an interest-free arranged overdraft. Yes, the joys of having the freebies will come to an end and you must pay up like everybody else! It’s important to note that over time some banks will reduce the amount of your overdraft and you would have to start making repayments if you’re in it.
5 Top Tips for Choosing A Student Bank Account
Many banks want you to sign up with them so they will use perks like freebies to lure you in without giving you the thought if it’s the right bank for you. Stay alert! Perks like a free railcard… (though nice), cash rewards, and exclusive deals should not tempt you if you feel the services provided do not serve you. Let’s go through some of the important details when choosing the right bank account:
1. Go Big With Your Overdraft
Go for the largest arranged overdraft limit with the longest 0% overdraft facility. Student bank accounts have the luxury of obtaining an interest-free overdraft, meaning you pay back nothing more than what you borrow. Keep a mental note that this should be used in case of emergencies. This will allow you to not spend it frivolously.
2. The Difference Between Up to & Guaranteed!
When you have been accepted for an overdraft, understand the amount offered to you. Many banks increase your overdraft limit over the years, so check to see if you’re being offered the full amount from the start so you don’t go over your limit.
3. Understand the Terms & Conditions
Before you commit to an overdraft, ensure you understand the terms and conditions, especially when after you graduate as the services provided change with your status.
4. Credit Rating
Due to the nature of student accounts, you’ll undergo a credit rating check and this will determine how much overdraft you’ll be offered. To better understand your credit score, check out Experian and find out for free.
5. Stay Smart, Not Loyal
Although banks want to build trust with you, it’s in your best interest to always be on the lookout for better deals. When it comes to perks and benefits, think of what has the best payoff long-term financially, not just what’s in front of you. Use comparison websites like Which? and Money Saving Expert to see more options and see their pros and cons side-by-side.
There you have it! Here are all the tips you need to know on how to open a student bank account. Opening a bank account is a big step towards adulthood. It symbolises the start of your independence and is a great step to further improve your financial literacy. With all the student accounts offered by various banks, take the time to research each one to find out what’s best for you. See more of our money advice with tons of advice and info on how to budget as a student.
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