Which is the best student bank account for you?
With university offers coming in thick and fast, it’s a good time to start thinking about choosing a student bank account. Although to set this up, you will often need a UCAS confirmation letter, either for an unconditional offer, or a conditional offer, which may stop you opening your account until August. Despite this, starting to choose the right student account now is a good idea, since all the major banks offer competing and varied deals.
Many offer additional perks such as Amazon Prime, or railcards, however, make sure you look at more than just this. Most importantly think carefully about overdrafts. Do you need one? What are the interest rates on them? How big an overdraft do you need?
Below is a summary of the major student bank accounts for 2018/2019 and the relative information to help you on your way, focusing mainly on interest rates, overdrafts and any additional perks.
Santander 1 2 3 Student Current Account
• AER interest ate of 3% on balances between £300 and £2000 (and 1% for balances of £100-£300)
• Interest-free and fee-free Arranged Overdraft of up to £1500, and £2000 if you have a 4 or 5-year course at University
• Free 4-year 16-25 Railcard saving you up to a 1/3 off rail travel in Great Britain - these are a great way to save money when travelling between University and home so even if you do not go with Santander I recommend you look at getting yourself one.
The Santander option is my favourite student bank account, with an AER, fee-free overdraft and the Railcard. However, every student is in a different situation, so the following accounts may work better for you.
NatWest Student Account
• Fee-free overdraft of £500 in the first term which you can increase to £2000 after that if it suits you
• You can apply for a NatWest student credit card
• Free 4-year Young Persons Coach Card, giving you 1/3 of UK fares and 10% off European fares - again, a coach card is a recommended money-saver if you think coach travel will be the main form of transport you use to get to and from University.
TSB Student Bank Account
• Receive 5% AER on balances up to £500 which is a huge interest so worth looking at if you know you will have a smaller amount of money in your account
• Interest-free and fee-free overdraft of £500 for the first six months and increasing to £1500 after that
• Chance to apply for a Student Credit Card
• 1% AER on balances up to £1000
• Fee-free overdraft beginning at £1000 which you can increase to £3000 by your third year upon request
• Upon graduation your account switches to the Nationwide FlexGraduate Account
Halifax Student Current Account
• AER interest rate of 0.10% paid monthly
• Fee-free overdraft of up to £1500 for the length of your course and an extra year after you graduate
HSBC Student Bank Account
• Fee-free and interest-free overdraft up to £1000 and option to increase to £2000 in year 2 and £3000 in year 3
• Student Credit Card subject to account conduct
• ‘Student Exclusives’ including discounts, competitions and tickets
• Also available to Level 4+ Apprentices
Barclays Student Additions Account
• Fee-free overdraft of £500 which you can increase to up to £3000
• Cash-back on selected purchases
• A fun addition at Barclays is that you create your own debit card by adding a favourite photo to your contactless card!
Lloyds Student Account
• Fee-free overdraft up to £1500 years 1-3 and £2000 years 4-6
• Your account will convert to a Graduate Account when you complete your course, which has a fee-free overdraft up to three years after graduation.
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