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Student Bank Accounts

Grab the top overdrafts and freebies in 2017/18

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Rosie | Edited by Martin

Updated September 2017

Best Student AccountsRailcards, 0% overdrafts and discount cards; banks love reeling new students in with goodies, and the latest batch of accounts are out.

This is a guide to bagging the best deal, whether you're a fresher or just refreshing finances.

The student account need-to-knows

  • Get the biggest 0% overdraft – unless huge freebies beat it

    Student accounts are simply bank accounts made for those in higher education. They let you pay money in and out, and offer additional benefits such as an interest-free overdraft.

    2

    Most students need an overdraft, where the bank lets you spend more than you've got (at no extra cost) to a set amount. Aim to get the biggest and longest 0% overdraft you can – the only time this doesn't apply is if the freebie on offer is so valuable to you it outweighs this.

    Be wary of banks offering bigger overdrafts than our top picks – some give 'guaranteed' amounts, others 'up to' amounts – so make sure you're comparing like for like.

    It's also worth noting that many student bank accounts offer tiered overdraft amounts, which increase with each year of study, so you could end up with a bigger overdraft limit after your first year. However, you must ask for extensions each year, even on guaranteed limits – they're not applied automatically.

    Also be wary of applying for the maximum overdraft possible just because you can. If you budget well you may not need it as anything other than a buffer, and the smaller your overdraft, the less likely you are to get caught in a dangerous spending spiral.

    Here are the student bank accounts available for new customers and the 0% overdraft amount they offer:

    Lender 0% overdraft amount
    Bank of Scotland Up to £1,500 in years 1-3 then up to £2,000
    Barclays Up to £1,000 in year 1, up to £2,000 in year 2, then up to £3,000
    Halifax Up to £1,500
    HSBC Up to £1,000 in year 1, up to £2,000 in year 2, then up to £3,000
    Lloyds Up to £1,500 in years 1-3 then up to £2,000
    Nationwide £1,000 in year 1, up to £2,000 in year 2 then up to £3,000
    NatWest Up to £2,000
    Royal Bank of Scotland Up to £2,000
    Santander £1,500 in years 1-3 then £1,800 in year 4 and £2,000 in year 5
    TSB Up to £1,500

    Last updated Aug 2017.

    Quick questions

    When can I open a student bank account?

    Do you have the right ID to open an account?

    I'm an existing student. Can I switch to a different bank account?

  • Never go over your overdraft limit

    This isn't a rule just for students, it's a rule for life. The game totally changes if you go beyond your overdraft limit – charges shoot up and you can be caught in a vicious cycle that's tough to ever escape from. If you stay within your limit there's usually NO COST.

    If you're struggling, at least talk to the bank. Try to agree an extension but remember, you are likely to be charged interest, up to a huge 24% EAR. It's always far better to plan and budget to avoid this.

    If not, or if you go over without permission, the charges can be enormous – up to £15 per transaction (so a shopping trip spending £30 in five debit card transactions could see you facing £75 of charges) – beware!

    Quick question

    What is an overdraft?

  • Beware, you'll be credit scored

    When you apply for debt products, including a bank account with an overdraft, the bank will credit score you to decide how desirable a customer you are based on behavioural predictions from your previous financial data.

    As a student, it's likely there'll be very little data on you, which makes credit scoring very difficult. Sadly this can leave some students rejected due to ridiculous anomalies, and there may be no rhyme, reason or solution to this. Read the Build Your Credit History and the main Credit Scoring guides for more info.

  • DON'T pick based on the closest branch or ATM

    Just because there's a particular bank on campus, or a conveniently-located cash machine nearby, it DOESN'T mean you should choose an account with it.

    You can withdraw cash free of charge from any bank's ATM and almost every bank gives online access. Branch location has little relevance for able-bodied students. 1To compare, examine what's on offer and go for the best deal.

  • After uni, switch to a top graduate account

    Your aim straight after uni should be to pay down your 0% overdraft. If that's not possible, for at least a year after finishing your course, you're still eligible for preferential terms, including 0% interest overdrafts, allowing you to gradually pay off the debt.

Best buys Top student accounts 2017/18

The high street banks compete in a red-hot battle. They publish ever bigger overdraft limits, but then sneakily won't allow all students to have them. The key is whether the overdraft is 'guaranteed' or 'up to' – the latter means you'll only get it if you have a good credit record, and all accounts require you to pass a credit check.

Some banks also try and attract students with the promise of freebies, from railcards to Amazon vouchers. While you should never be enticed just by these offerings, they sometimes offer decent overdraft limits too so can be a good option.

We've included the best of both worlds here.

Nationwide Building Scoiety logo

Big 'guaranteed' 0% overdraft which increases with your year of study to a max of £3,000

Nationwide Building Society*

The Nationwide Building Society* FlexStudent account is our top pick for large 0% overdraft limits of £1,000 in year one, up to £2,000 in year two and up to £3,000 in year three.

Others may advertise higher amounts, but they are 'up tos'. With Nationwide these are actual amounts that you will get, though we've called it 'guaranteed' - as you'll only get this much if you keep to the account conditions and don't have credit problems.

If you know you won't need the full overdraft, the Santander account below may be better, as it also comes with a railcard freebie, worth £90.

Need-to-knows
  • You need to be 18 or over to open this account and have lived in the UK for the last three years. You also need to pay in at least £500 per term e.g. your maintenance loan/cash from parents.
  • You need to apply for the account within two months either side of your course start date.
  • If you're in credit, you'll get 1% AER (variable) interest on balances up to £1,000
  • You can set your own overdraft limit - you don't have to ask for the maximum right away.
  • After your course, you'll be transferred automatically to a Nationwide FlexGraduate account (more info in the key questions below).
  • Please let us know how big an overdraft you get: Nationwide feedback.
Stats box
  • In-credit interest: 1% AER (variable) up to £1,000
  • Arranged overdraft cost above 0% limit: N/A (you won't be able to use it until you get the balance back under your limit)
  • Unarranged overdraft fees: N/A (you won't be able to use it until you get the balance back under your limit)
  • 0% overdraft: Year 1: £1,000 Year 2: up to £2,000 Year 3 & beyond: up to £3,000
Key questions

What's the deal with going over your overdraft limit? This account's not designed to allow you to do that. But, if you do go over your limit, you won't be able to use the account until you get the balance back under your agreed limit - so no debit card spending, no cash withdrawals.

If you're not at the maximum overdraft for your year of study, you can request to increase the limit to the maximum.

Can I get a graduate account? Once you've graduated, Nationwide will transfer your account to be a FlexGraduate account. It's not available to apply for - you can only get it if you've had the FlexStudent account.

In the FlexGraduate account, your 0% overdraft tapers off over three years (£2,500 one year after graduation; £1,750 after two years and £1,000 after three years), but other graduate accounts may beat it.

Santander

Free 4-yr railcard & decent 0% overdraft, though amounts aren't guaranteed

Santander*

Santander* gives a four-year 16-25 railcard for full-time students, letting you get a third off rail travel, which we value at £90. However, the overdraft offered here is smaller than Nationwide's above though, so if you know you'll need more money best to prioritise a bigger 0% than a freebie.

With Santander, you get an 'up to £1,500' 0% overdraft for three years, though it's judged on a case-by-case basis. If your course is longer, the maximum 0% limit increases in further years. You could switch to another account with a bigger overdraft after your first year and keep the railcard, as you get it within three weeks of account opening.

Need-to-knows
  • You must pay in £500/term and register for online banking to be eligible for the railcard and 0% overdraft.
  • You automatically get a £250 overdraft when you open the account, then up to £1,500 in years one to three if you make the £500/term pay-in.
  • You get up to £1,800 in year four and up to £2,000 in year five, if your course is that long.
  • The overdraft limits aren't guaranteed but most accounts usually get close to them.
  • You can only apply if you've an unconditional uni place, or you're already a student.
  • If you're in your second year or later you can switch to this account from your existing student account and you'll still get the four-year railcard.
  • We valued the railcard by working it out against a three-year railcard which normally costs £70, as four-year cards aren't available for general purchase. The railcard is also available to full-time students aged 26 and over.
  • Santander shares its £85,000 UK savings safety guarantee with Cahoot, so don't hold more than £85,000 across the two banks.
  • As a 123 account holder you're also eligible for savings accounts and loans at preferential rates, eg, a linked 5% regular saver.
  • Please let us know how big an overdraft you get: Santander feedback.
Stats box
  • In-credit interest: 1% for £100-£200, 2% for £200-£300, 3% between £300 and £2,000
  • Arranged overdraft cost: No fees
  • Unarranged overdraft fees: £5 daily charge (max 10/month), paid/unpaid fees: £5/£10 per item. Max monthly charge of £95
  • 0% overdraft: Years 1-3: up to £1,500. Year 4: up to £1,800. Year 5: up to £2,000.
Key questions

How do I get the railcard? To get the railcard, you'll need to open a Santander 123 Student Account for the first time and make the £500/term pay-in. You must register for online banking, which will take 7-10 days to set up, then enter a special code on the railcard website, which is valid for 60 days ONLY. Make sure you enter the code within the timeframe, as they won't issue you another code. You'll get your railcard within five working days of ordering.

Can I get the railcard if I'm in Northern Ireland? Unfortunately the railcard isn't valid in Northern Ireland, although the overdraft still makes this account a decent option.

What should I avoid with this account? Go into an unauthorised overdraft, and the fees are huge, so avoid at all costs. Arranged overdrafts aren't permitted above the set limits.

How can I give feedback on this account? Please let us know your experiences and any problems: Santander feedback.

HSBC

Free £60 Amazon voucher and decent max 0% overdraft

HSBC

The HSBC account offers a free £60 Amazon gift card and a year's Amazon Prime when you open the account by 31 October 2017.

You'll definitely get between a £500 and £1,000 0% overdraft when you open the account, but will need to apply for a larger 0% overdraft after your first year if you need one, and the limit you'll get is judged on a case-by-case basis.

Need-to-knows
  • To get the £60 Amazon gift card you must have opened the account by midnight on 31 October 2017.
  • You'll also get a free year's Amazon Prime Student membership worth £39 when you redeem the gift card - make sure you diarise to cancel this when the twelve months is up or you'll be charged.
  • If accepted, you'll get a 0% overdraft of £500-£1,000 for your first year. You must then ask for further increases, but you won't be guaranteed to get the full amount.
  • You cannot open or switch to this account if you're past your first year of study.
  • You can only apply if you've an unconditional place at university, or you're already a student. Level 4+ apprentices can also open the account, though only in branch.
  • Please let us know how big an overdraft you get: HSBC feedback.
Stats box
  • In-credit interest: None
  • Arranged overdraft cost: Can only borrow up to £3k
  • Unarranged overdraft fees: No fees
  • 0% overdraft: Year 1: £500-£1,000 Year 2: up to £2,000 Year 3 & beyond: up to £3,000 (not guaranteed)

Tool: compare ALL student accounts

Ten high street banks offer student accounts, each with varying overdraft limits, incentives and terms & conditions.

We've compiled a list here, which allows you to compare different student accounts. You can compare different aspects of the accounts – eligibility criteria, 0% overdraft size, freebies, unauthorised overdraft interest rates & more.

This tool's both for new students starting in 2017/18, and for students already at university. If you already have a student account, it's worth checking each year if there's a new account that would suit you better. If so, ditch & switch.

Compare student accounts Check up to two at a time to compare below

To compare more accounts, deselect one or more of the selected banks above

Bank of Scotland

Barclays

Santander*

Halifax

HSBC

Lloyds Bank

Nationwide*

NatWest*

RBS*

TSB

Eligibility criteria (and minimum age)
You must be 17 or over (18 to apply for an overdraft), have lived in the UK for the past three years and be studying on a full-time course that's at least two years long, or be on a one-year access course leading onto a full-time degree.

In full-time higher education in the UK, over 18 years of age, studying for a degree, equivalent (for at least two years full time), or post-graduate course for a minimum of 12 months.

You must pay your main source of funding into the account and provide evidence of study i.e. a letter from UCAS, your university or the Student Loans Company, or a valid student ID card.

At least 18 years old and resident in UK. Must have a confirmed place at a higher education institution for a degree or HND course. Must pay at least £500 into the account each term. Minimum 18 years old, studying full-time at degree level or equivalent. Letter of confirmation from UCAS is required.

Min age 18, resident in UK/Channel Islands/Isle of Man for at least 3 years, must not hold any other student account. Must have proof of entry onto full-time higher education course.

A restricted account is available if you don't yet have confirmation of your course. It will be upgraded to the full student account when you show your proof of entry.

You must be 17 or over (18 to apply for an overdraft), have lived in the UK for the past three years and be studying on a full-time course that's at least two years long, or be on a one-year access course leading onto a full-time degree.

You must be 18 or over, a UK resident for the last three years and be studying on a full-time UCAS course for at least two years.

You must apply for the account within two months either side of your course start date.

You must be 17 or over (18 to apply for an overdraft) and a UK resident, studying for an undergraduate course of at least two years or a full-time postgraduate course, at a university or college of higher education in the UK.

16 digit UCAS Status Code required as proof of student status.

You must be 17 or over (18 to apply for an overdraft) and a UK resident, studying for an undergraduate course of at least two years or a full-time postgraduate course, at a university or college of higher education in the UK.

16 digit UCAS Status Code required as proof of student status.

You must be 17 or over, have lived in the UK for the past three years and be studying on a full-time course that's at least two years long, or be on a one-year access course leading onto a full-time degree.
Maximum interest-free overdraft limits
Year 1
£1,500 tiered in the first year:
£500 for the first 6 months,
£1,000 in months 7-9,
£1,500 after that.
Guaranteed £500 upon opening. Then decided on a case by case basis for amounts up to £1,000. £1,500. Up to £1,500. Guaranteed £500-£1,000 upon opening. £1,500 tiered in the first year:
£500 for the first 6 months,
£1,000 in months 7-9,
£1,500 after that.
£1,000.

Up to £500 in first term

Up to £2,000 limit from second term.

Up to £500 in first term

Up to £2,000 limit from second term.

£1,500 tiered in the first year:
£500 for the first 6 months,
£1,000 in months 7-9,
£1,500 after that.
Year 2
Up to £1,500. Up to £2,000 £1,500. Up to £1,500. Up to £2,000. Up to £1,500. £2,000. Up to £2,000. Up to £2,000. Up to £1,500.
Year 3
Up to £1,500. Up to £3,000. £1,500. Up to £1,500. Up to £3,000. Up to £1,500. £3,000. Up to £2,000. Up to £2,000. Up to £1,500.
Year 4
Up to £2,000. Up to £3,000. £1,800. Up to £1,500. Up to £3,000. Up to £2,000. £3,000. Up to £2,000. Up to £2,000. Up to £1,500.
Year 5
Up to £2,000. Up to £3,000. £2,000. Up to £1,500. Up to £3,000. Up to £2,000. £3,000. Up to £2,000. Up to £2,000. Up to £1,500.
Interest-free average
3-year course
£1,500. Up to £2,000. £1,500. Up to £1,500. Up to £2,000. £1,500. £2,000. Up to £2,000. Up to £2,000. £1,500  
5-year course
£1,700. Up to £2,400. £1,660. Up to £1,500. Up to £2,400. £1,700. £2,400. Up to £2,000. Up to £2,000. £1,500.
Interest-free limits guaranteed, or case-by-case?
No, decided case by case. Subject to application and status. Not guaranteed, assessed on individual basis.

£500 needs to be paid in each term to keep the overdraft facility.
Subject to application and status.

Credits of £500 per quarter will be required to consider extending an overdraft.

Overdraft limit will be increased over time and based upon account conduct.
Guaranteed £500-£1,000 upon account opening. All overdraft requests are subject to status and are assessed on an individual basis. No, decided case by case.

Nationwide tells us that all accepted customers will get the £1,000 limit in year one, and then as long as you're using the account as your main account and don't have any debt problems you'll definitely get the full amount in further years.

To remain eligible for the overdraft you must pay in at least £500 per term.

Not guaranteed.

To remain eligible for the overdraft, you'll need to use it as a main current account by
depositing at least £750 every six months, and making at least three debit transactions every month.

Not guaranteed.

To remain eligible for the overdraft, you'll need to use it as a main current account by depositing at least £750 every six months, and making at least three debit transactions every month.

No, decided case by case
Agreed overdrafts beyond the 0% limit
£6 monthly fee and 8.21% EAR.

N/A

N/A No charge if amount falls under £10 buffer. 7.2% EAR for sums over £3,000. N/A, you can only borrow up to £3,000. £6 monthly fee and 8.21% EAR. N/A. 0%. 0%. £10 buffer, then a £6 monthly fee and 8.21% EAR.
Unauthorised overdraft rates and fees

8.21%
£10 buffer and a grace period until 3.30pm to pay and avoid overdraft fees.

Monthly fee: £6. Returned item fee: £10.
Daily fees:
Up to £10 - no charge.
Up to £25 - £5.
Over £25 - £10.

Maximum £95 per charging period

No unarranged overdraft fees from 2 November 2017.

No unarranged overdraft, but unpaid item fee of £8 per day (max one per day).

£5 per day, max 10 days per month.

Paid item fee: £5

Unpaid item fee: £10.

Maximum £95 per charging period

24.2% EAR.

£10 buffer

Monthly fee: £28

Unpaid item fee: £10 (max 1 a day).

Maximum £40 per charging period

No unarranged overdraft fees from 2 November 2017.

N/A, you can only use up to £3,000.

8.21%
£10 buffer and a grace period until 3.30pm to pay and avoid overdraft fees.

Monthly fee: £6. Returned item fee: £10.
Daily fees:
Up to £10 - no charge.
Up to £25 - £5.
Over £25 - £10.

Maximum £95 per charging period

No unarranged overdraft fees from 2 November 2017.

N/A - you can dip into your unarranged overdraft but won't be able to use the account until you pay it off. 0%

Unpaid fee: £8 per item (max £8 per charging period).
0%

Unpaid fee: £8 per item (max £8 per charging period).

8.21%
£10 buffer and a grace period until 3.30pm to pay and avoid overdraft fees.

Monthly fee: £6. Returned item fee: £10.
Daily fees:
Up to £10 - no charge.
Up to £25 - £5.
Over £25 - £10.

Maximum £80 per charging period

In-credit interest rate
0%. 0%. 1% interest on balances from £100-£200, 2% if balance is £200-£300, or 3% for balances from £300 up to £2,000. 0.1%. 0% 0%. 1% interest on balances up to £1,000. 0% . 0%. 5% AER variable interest on balances up to £500.
Can you transfer from other banks and get this year's deal?
Yes. This will be based on the year of their study. Yes. Yes, you can switch your existing student account to Santander using its account transfer service for a guaranteed £250 interest-free overdraft. Once the account's been credited with £500, the correct level of overdraft will be given. If you switch you'll still get the four-year railcard. Yes. Overdraft will be based on personal circumstances. Yes it's open to new customers as long as they are starting their first year on a qualifying course. You cannot transfer to this account if you're past your first year of study. Yes. This will be based on the year of their study. Yes. Overdraft limit is based on year of study. Yes. Overdraft limit is based on year of study. Yes. Overdraft limit is based on year of study. Yes. This will be based on the year of their study.
Do the T&Cs stop you opening a student account elsewhere?
Yes. No, but must use the account as your main bank account. No, but you can't have more than one Santander current account. Yes. Yes. Yes. No, but must use the account as your main bank account.
No, but must use the account as main bank account. NatWest reserves the right to remove 0% overdraft rate. No, but must use the account as main bank account. RBS reserves the right to remove 0% overdraft rate.
Yes.
Anything else?
N/A. N/A. If you're over 25 years old and in full-time education, you can still get a Santander 16-25 railcard. N/A.

Fee-free student credit card with a limit of £500 (APR 18.9%).

Login via HSBC's Student Exclusives website and you'll get discounts on major brands such as Amazon, Krispy Kreme and Lonely Planet.

N/A. N/A. International students are not eligible for the overdraft. International students are not eligible for the overdraft. N/A
Apply Apply Apply* Apply Apply Apply Apply* Apply* Apply* Apply

Don't need an overdraft? Maybe try stoozing...

Don't try stoozing unless you're a financial superheroFor that rare student breed, the ones who are always in credit, there are very few choices (even if you're occasionally overdrawn, go for the top overdraft deal).

No student accounts pay any significant interest if you're in credit and most top standard accounts require an income over £6,000 to open.

The prime option is to get a normal student account, and if you've got any spare cash, dunk it in the Top Savings Accounts. But there's a way to boost even that.

How to stooze your student account
Please don't even read this unless you're an anally-retentive financial superhero. The consequences of getting it wrong can be a real problem and with low savings rates the current returns just aren't that good anyway.

Those always in credit could PROFIT (provided they're financially disciplined) by opting for the account with the biggest and longest lasting interest-free overdraft and using a budgeting technique we call 'current account stoozing' (see the Stoozing guide for a full definition of the word).

Once you get your account, take cash out of it and plop it into a top-paying instant access saving account (see Top Savings and Cash ISA guides) leaving yourself reasonably near, but never over, your overdraft limit. Make sure you also manage any changes in limits and leave enough room to do your normal spending.

As a result, you're earning interest on money the bank lends you for free. Done right, this can add around £120 to a student's coffers over the length of a course. Similar tricks are possible with student loans (see the Student MoneySaving article). However, this isn't an excuse for spending or borrowing more. If you're not financially disciplined, please DON'T try it.

Do a budget the right way

It's a mantra parents push at their student offspring all the time. "You've got to do a budget young Johnny, it'll all go to hell if you don't, please do it Johnny, please..."

Yet "do a budget" is a meaningless phrase unless you understand your income.

work

With people who work it's an easy message:

You shouldn't spend more than you earn.¯


study

But when it comes to those going to university, you need to:

Add up student loan + grants + employment earnings + money from family, and that is your income. ¯


While 0% overdrafts are very useful and should help with cash-flow issues while you're a student, they're never part of your income. Always remember, an overdraft is a LOAN and must be repaid (its rate will jump once you graduate).

But if you're going to university next year or are currently studying, funding is key. Make sure you're aware of the loans and grants available to you and plan accordingly. See our Student Loans 2017/18 guide for more on fees and funding.

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