Student Bank Account Guide 2016

best student accounts 2016

Picking a student bank account isn’t an easy thing to do. It’s likely that this is the first time you’ve had to make a big financial decision and it’s important that you don’t just pick the same bank as your parents or stick blindly with the bank you’re at - because it may cost you down the line.

We’ll show you exactly what you need to look for and explain how to avoid unexpected fees.

Check out how much you’ll be charged for going over your overdraft

If you go over your overdraft (which a lot of students will), it’s likely you’ll be charged an arm and a leg in fees and interest. Some banks will give you a buffer to allow you time to get out of your overdraft, but some will take advantage of your spending.

If you are in trouble and it looks like you are going to go over your overdraft, negotiate with your bank as soon as possible. Some banks will let you off if it’s a one-off occasion, so its always worth a shot.

Get the biggest 0% interest overdraft possible

Unfortunately, you’re probably going to need an overdraft to survive as a student. Rather than pay for that overdraft, you want to try and get a 0% interest overdraft account. This means that if you do go over (to an arranged limit), you’ll avoid hefty fees.

Remember, some banks will guarantee you an overdraft amount, while others will give you an ‘up to’ account, which depends on your credit score. Make sure you know what your limit is.

student account zero percent overdraft

Don't get sucked in by the freebies

Banks really want you to join them. As a university student, it's likely you’re going to be making a decent amount of money in the future and putting that money in your account (which they can make money from). You’re going to be offered freebies to sweeten the deal, but remember, the freebies aren't everything.

Sure, a free NUS card is nice to have - but if you're charged £60 because you go over you overdraft, it's not really value for money. The most important things are the size of the 0% overdraft and the charges if you go over it.

student bank account freebies

But I don’t need an overdraft

Good for you! If you’ve got enough money to survive at university without an overdraft, you still should consider potentially getting one. This is the only time in your life you’ll be offered a 0% overdraft. If you popped it in your ISA account, you’ll get tax free savings on the money. You then pay it back before you have to pay interest, and keep the interest you make. Easy.

make money from student accounts

How do I open a student bank account?

You can apply online for most student bank accounts, but you’ll need to prove who you are by taking supporting documents into your local branch or sending off original documents in the post.

You’re going to need one or two forms of photo ID (passport/driver’s licence), proof of address (bank statement and bills) and proof of student status (woop!), which is your letter of acceptance from your university or UCAS offer letter.

Santander

Overdraft amount (interest free) - You automatically get a £250 overdraft when you open the account, then up to £1,800 in year one to three if you make the £500/term pay-in. It goes up to £1,800 in year four and £2,000 in year five.

What’s the freebie? A four-year 16-25 Railcard (worth about £90)

Is it guaranteed or ‘up to’? ‘Up to’

Credit check? Yes (it says most people will get the full £1,500 after a full credit check).

How much is it if you go over your overdraft? £5 a day capped at 10 days per monthly statement period Unarranged overdraft Usage Free. Overall monthly fee cap of £95. Paid transaction fee of £5 and Unpaid Transaction Fee of £10.

Is the arranged overdraft free? No

In-credit interest? 3% AER / 2.96% (variable) on balance from £300 up to a maximum of £2,000

The Co-op bank

Overdraft amount (interest free): £1,400 in year one, £1,700 in year two and £2,000 in year three.

What’s the freebie? No freebie

Is it guaranteed or ‘up to’? ‘Up to’, but it’s not outwardly the biggest 0% overdraft, but 90% of people will get the full amount.

Credit check? Yes

How much is it if you go over your overdraft? 18.9% AER plus £15 unpaid item free (max £150 per quarter)

Is the arranged overdraft free? No

In-credit interest: Year 1: £1,400, Year 2: £1,700 and Year 3: £2,000

HSBC

Overdraft amount (interest free): You’ll get £500 initially, then up to £3,000

What’s the freebie? A £60 Amazon gift card

Is it guaranteed or ‘up to’? ‘Up to’ - it has the “biggest” 0% overdraft, but we’ve heard that student rarely get that amount.

Credit check? Yes

How much is it if you go over your overdraft? You can’t go over your arranged overdraft, so no horrible charges.

In-credit interest? Yes, 2% AER on balances up to £1,000 (in the first year only).

Halifax

Overdraft amount (interest free): ‘Up to’ £3,000 but only the first £1,000 is guaranteed

What’s the freebie? No freebie

Is it guaranteed or ‘up to’? ‘Up to’, you can technically get up to £3,000 but we've heard it is pretty unlikely to get more than the £1,000.

Credit check? Yes

How much is it if you go over your overdraft? 24.2% plus monthly fee of £28 and £10 returned item fee.

Is the arranged overdraft free? Yes, 7.2% AER

In-credit interest? Yes, 0.2% AER

Natwest

Overdraft amount (interest free): Up to £2,000

What’s the freebie? A four year National Express coach card

Is it guaranteed or ‘up to’? ‘Up to’

Credit check? Yes

How much is it if you go over your overdraft? £6 for each payment over your overdraft (max £60 per period).

In-credit interest? None

RBS

Overdraft amount (interest free): Up to £2,000

What’s the freebie? A four year National Express coach card (worth around £40)

Is it guaranteed or ‘up to’? ‘Up to’

Credit check? Yes

How much is it if you go over your overdraft? £6 for each payment that goes over your overdraft (max £60 per period).

In-credit interest? None

Barclays

Overdraft amount (interest free): Up to £3,000

What’s the freebie? No freebie

Is it guaranteed or ‘up to’? ‘Up to’

Credit check? Yes

How much is it if you go over your overdraft? There is no unauthorised borrowing available so no charges or fees for going into an unauthorised limit, unless a transaction is returned unpaid due to insufficient funds (fee of £8 for each returned transaction, max.1 per day). There is a £15 buffer zone on the overdraft - if this has not been exceeded, there would be no charge for the unpaid transaction.In-credit interest? None

Lloyds

Overdraft amount (interest free): Up to £1,500

What’s the freebie? NUS Extra card (worth about £12)

Is it guaranteed or ‘up to’? ‘Up to’

Credit check? Yes

How much is it if you go over your overdraft? 8.21% AER and £6 a month.

In-credit interest? None

TSB

Overdraft amount (interest free): Up to £1,500

What’s the freebie? No freebie

Is it guaranteed or ‘up to’? ‘Up to’

Credit check? Yes

How much is it if you go over your overdraft? 8.21% AER and £6 a month.

In-credit interest? None


Don’t forget, once you’ve graduated - make sure you switch banks again to ensure you get the very best deal. Check out our Graduate bank accounts guide.

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