Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

The MoneySaving Forum: join to chat & swap tips with other MoneySavers. Learn how in the Forum Introduction Guide

Student Bank Accounts Grab the top overdrafts and freebies in 2014/15

New to the site? Quick message from Martin:

All the latest deals, guides and loopholes go in MoneySavingExpert's
free weekly email. Don't miss out - join the 10m who get it emailed!

FAQs | Unsubscribe 
Past Emails | Privacy

Best Student AccountsRailcards, 0% overdrafts and discount cards; banks love reeling new students in with goodies, and they're getting competitive. This is a guide to bagging the best deal, whether you're a fresher or just refreshing finances.

The accounts in this guide are 2014/15 accounts, and are open to any students currently studying - so, if you've already got an account, why not see if you can switch to a better deal?

Five need-to-knows

1.Get the biggest 0% overdraft - unless huge freebies beat it

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 guaranteed 0% overdraft - 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. However, you must ask for extensions each year, even on guaranteed limits - they're not applied automatically.

2. 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'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 £25 per transaction (so a shopping trip spending £30 in five debit card transactions could see you facing £125 of charges!) - beware! More info in Bank Charges Compared.

3. 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 Credit Scoring guide for more info.

4. 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, 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. To compare, examine what's on offer and go for the best deal.

5. After uni, switch to a top graduate account

You'll be pleased to know that 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.

Switch to the Top Graduate Account to continue getting the benefits.

Student accounts: the basics

What is a student account?
Student accounts are 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.

You'll get a debit card, which allows you to pay for things in shops and online without the need to withdraw cash.

What is an overdraft?
An overdraft facility allows you to spend more money than you have in your account, up to a certain limit. Student accounts provide a set level of overdraft interest-free for the duration of your course.

Remember the bank is just lending you this money. It'll need to be paid back, so don't get too comfortable. Always keep in your mind that's it's not actually yours, it's the bank's.

It costs nowt... UNLESS you exceed your overdraft
The cost of banking is measured in terms of interest rates and fees. Interest is the cost of borrowing money, or the reward for saving it. So 3% interest on savings means you earn £3 per £100 per year on the cash.

All of our top pick accounts provide an agreed interest-free overdraft limit. Anything up to that will not be subject to fees or interest - good news.

However, this is all provided you stay within your overdraft limit. Exceeding it can cost up to £25 per transaction, plus interest on top.

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?

Best buys: top student accounts

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 it's just a reported maximum. All accounts require you to pass a credit check.

Santander

Santander* - 4-year railcard freebie & good 0% overdraftOverdraft up to £1,500, plus up to 3% in-credit interest

  • Overdraft up to £1,500
  • Apply*

Santander* gives accepted new 123 Student Current Account holders who pay in £500/term a four-year 16-25 Railcard (full-time students aged 26 and over can also get the railcard), which normally costs £120, and gives a third off most rail journeys.

You'll also get an 'up to £1,500' overdraft for three years (though what you'll get is judged on a case-by-case basis). You could even 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, and it'll be valid for the full four years even if you switch away.

Unfortunately the railcard isn't valid in Northern Ireland - if that affects you, you may want to consider the other accounts listed below, although the overdraft on this account still makes it a decent option.

  • In-credit interest: 1% for £100+, 2% for £200+, 3% for sums between £300 and £2,000
  • Arranged overdraft cost: No fees
  • Unarranged overdraft fees: £5 daily charge (max 10/month) plus paid/unpaid fees of £5/£10 per item
  • 0% overdraft: Year one: £1,500 Year two: £1,500 Year three: £1,500
Co-op

Co-op Bank - big year one 0% overdraft9 out of 10 given max limits, plus good customer service

  • Overdraft up to: £2,000
  • Apply

The ethical Co-operative Bank has got strong - but not the overall biggest - 0% overdraft limits of £1,400 0% in year one, £1,700 in the second year and £2,000 in the third, plus came second overall in our poll on customer service.

But unlike the banks below which shout about huge £3,000 limits, Co-op's told us 90% of successful applicants will get the full amounts advertised (if you pay in your student loans, and don't incur charges, plus you must ask for the increases at the beginning of each year). Please tell us if you get the full 0%.

I've heard a lot about Coop Bank - lots of scandal & it's unstable? We have to highlight recent scandals, solvency worries and the fact it's now 70% privately-owned.

You need to decide where you stand on the ethics of the bank, but the key fact on solvency is the first £85,000 of savings per person in the combined group (Co-op Bank, Smile, Britannia) is guaranteed by the Government-backed FSCS. This includes money in your student account (if you're lucky enough to have some). For how this works, see the full Savings Safety guide.

  • In-credit interest: None
  • Arranged overdraft cost above 0% limit: 9.9% EAR
  • Unarranged overdraft fees: 18.9% EAR plus £15 unpaid item fee (max £150 per quarter)
  • 0% overdraft: Year one: £1,400 Year two: £1,700 Year three: £2,000
HSBC

HSBC - joint highest maximum overdraftBut overdraft is low in first year. PLUS £60 AMAzon voucher

  • Overdraft up to: £3,000
  • Apply

The HSBC account also shouts loudly about a maximum interest-free overdraft of up to £3,000, but feedback tells us it's often only up to £1,000 by the end of year one.

If accepted, you'll initially get just £500. You must then ask for further increases, but you won't be guaranteed to get the full amount. We welcome your feedback, detailing if you were accepted and the overdraft limit you were offered.

As an added perk, if you're in your first year of uni and open an account before 31 Oct 2014, you'll be eligible for a free £60 Amazon gift voucher to spend in the online store. You'll also get £70 off any Kindle Fire HDX (available from 14 Aug 2014).

  • In-credit interest: 2% AER on balances up to £1,000 in the first year only
  • Arranged overdraft: Can only borrow up to £3k
  • Unarranged overdraft fees: No fees.
  • 0% overdraft: All years: £500 initially, up to £3,000 (not guaranteed)
Halifax logo

Halifax - joint highest maximum 0% overdraft 0% overdraft up to £3,000, though likely you'll get less.

  • Overdraft up to: £3,000
  • Apply

The Halifax student account gives overdraft limits of 'up to' £3,000, though only the first £1,000 is guaranteed - the rest's decided on a case-by-case basis. You can ask for increases from what you're given, but previous year's feedback was it's unlikely to go higher than the initial £1,000 in year one.

Never, EVER go over the interest-free limit, or you'll be stung with huge rates up to 24.2% AER plus a monthly fee of £28, and returned item fees of up to £10.

  • In-credit interest: 0.1% AER
  • Arranged overdraft cost: 7.2% EAR
  • Unarranged overdraft fees: 24.2% plus monthly fee of £28 and £10 returned item fee.
  • 0% overdraft: All years: £1,000 initially, up to £3,000 (not guaranteed)

Compare all student accounts

Nine 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 three accounts at the same time. 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 2014/15, 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 Compare up to three at a time below

2014/15 student account details
Eligibility criteria (and minimum age)

In full-time higher education in the UK, over 18 years of age, studying for a degree, equivalent, 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.

UK citizen or UK resident for at least 3 consecutive years. Over the age of 17 and a half, and in full-time higher education. Proof of funding is required (can be a letter from parents, or Student Loans Company). Must make an initial deposit of £300 to activate the overdraft.
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 levelor equivalent. Letter of confirmation from university is required.

Min age 17, 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, 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.
1st year undergraduate Student Accounts are available to both UK & International students who are completing:
(a) a full-time undergraduate higher education course of at least two years' duration; or
(b) a full-time postgraduate course, at a university or college of higher education in the UK.
Unconditional letter of acceptance required as proof of student status.
1st year undergraduate Student Accounts are available to both UK & International students who are completing:
(a) a full-time undergraduate higher education course of at least two years duration; or
(b) a full-time postgraduate course, at a university or college of higher education in the UK.
Unconditional letter of acceptance 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.
Minimum interest-free overdraft limits
Year 1
£200 automatic overdraft upon opening, up to £2,000.
£1,400.
£1,500.
£1,000 on opening. Then up to £3,000.
Guaranteed £500 upon opening. Then decided on a case by case basis for amounts up to £3,000.
£1,500 tiered in the first year:
£500 for the first 6 months,
£1,000 in months 7-9,
£1,500 after that.
Up to £2,000, tiered by term; £500 limit in first term,

£2,000 limit from second term.
Up to £2,000, tiered by term; £500 limit in first term,

£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 £2,000.
£1,700.
£1,500.
Up to £3,000.
Up to £3,000.
Up to £1,500.
Up to £2,000.
Up to £2,000.
Up to £1,500.
Year 3
Up to £2,000.
£2,000.
£1,500.
Up to £3,000.
Up to £3,000.
Up to £1,500.
Up to £2,000.
Up to £2,000.
Up to £1,500.
Year 4
Up to £2,000.
£2,000 (graduate).
£1,800.
Up to £3,000.
Up to £3,000.
Up to £2,000.
Up to £2,000.
Up to £2,000.
Up to £2,000.
Year 5
Up to £2,000.
N/A.
£2,000.
Up to £3,000.
Up to £3,000.
Up to £2,000.
Up to £2,000.
Up to £2,000.
Up to £2,000.
Interest-free average
3-year course
Up to £2,000.
£1,700.
£1,500.
Up to £3,000.
Up to £3,000.
.
£1,500.
Up to £2,000.
Up to £2,000.
£1,500
 
5-year course
Up to £2,000.
N/A.
£1,660.
Up to £3,000.
Up to £3,000.
£1,700.
Up to £2,000.
Up to £2,000.
£1,700.
Interest-free limits guaranteed, or case-by-case?
Subject to application and status.

Not guaranteed.

The first year £1,400 overdraft is guaranteed once the initial £300 deposit has been made. Overdrafts for 2nd, 3rd and 4th year are judged on a case by case basis.

Not guaranteed, assessed on individual basis.

£500 from your student loan or grant needs to be paid in each term to keep the overdraft facility.
£1,000 guaranteed on account opening. Further increments will need to be applied for.

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 at least £500 upon account opening. All overdraft requests are subject to status and are assessed on an individual basis.
No, decided case by case.
Not guaranteed. The maximum in first year is normally given. 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. The maximum in first year is normally given. 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

Fees will only be charged if overdraft extends beyond £2,000 limit.

Go over £2,000 and you'll be charged £1 per day. You can only use up to £3,000 of your overdraft.

9.9% EAR.
0%.
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.
£10 buffer, then a £6 monthly fee and 8.21% EAR.
0%.
0%.
£10 buffer, then a £6 monthly fee and 8.21% EAR.
Unauthorised overdraft rates and fees

N/A, you can only use up to £3,000 of your overdraft. Go over your £2,000 overdraft and you'll be charged £1 a day.

Unpaid item fee: £8 per day (max one per day).

18.9% EAR.

Unpaid item fee: £15

£5 per day, max 10 days per month.

Paid item fee: £5

Unpaid item fee: £10.

24.2% EAR for sums over £3,000.

£28 monthly fee for unauthorised overdraft usage.

Unpaid item fee: £10 max a day.

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.
0%

Unpaid fee: £6 per item greater than £6 (max £60 per charging period).
0%

Unpaid fee: £6 per item greater than £6 (max £60 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.
In-credit interest rate
0%.
0%.
1% interest on balances up to £500, 2% if balance is £200+, or 3% for balances from £300 up to £2,000.
0.1%.
2% interest paid on balances up to £1,000 in the first year of study. No in-credit interest for further years of study.
0%.
0% .
0%.
0%.
Can you transfer from other banks and get this year's deal?
Yes.
Yes, the overdraft will be in line with your year of study.
Yes, if you're in your 2nd year or above, 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.
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, but they won't be eligible for the free incentives (unless in 1st year). Overdraft limit is based on year of study.
Yes, but they won't be eligible for the free incentives (unless in 1st year). 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.
Yes.
No, but you can't have more than one Santander current account.
Yes.
Yes.
Yes.
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.
They don't offer a graduate account, so the overdraft facility (up to £2,000) will extend.
If you're over 25 years old and in full-time education, you can still get a Santander 16-25 railcard.
You'll get a personalised debit card, simply by uploading a photo or image to their gallery.

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 National Express, Krispy Kreme, 3 Mobile and Lonely Planet.

N/A.
You'll get tastecard membership when you register for digital banking and paperless statements.

International students are not eligible for the overdraft.
Fee-free student credit card with a limit of £500 (APR 19.9%).

International students are not eligible for the overdraft.
Yes.

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 easy:

You shouldn't spend more than you earn.¯

study

But when it comes to those going to university:

Students shouldn't spend more than they...

That's the big question that's never specified. Martin has a rule of thumb on it.

Add up student loan + grants + employment earnings + money from family, and that is your income. That's the amount you should try to budget to spend less than.

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 2014/15 guide for more on fees and funding.

What about when I graduate?

Banks know most customers remain loyal. If they get you now, when you're going to uni, they can make serious money out of you for a long, long time.

If you  get a better graduate account deal I'll eat my hat!However, savvy students can take advantage. Choose the right student account, max your gain from it, but don't let their short-term bribe buy you for life.

Your aim straight after uni should be to pay down your 0% overdraft. Many banks will roll you straight into their graduate accounts, but not all. Even so, it's worth checking the Top Graduate Accounts to ensure you get the best deal on the market.

Many of these accounts operate by reducing your 0% overdraft limit each year, allowing you to gradually pay it off before the interest-free period ends.

After that, any remaining overdrawn balance will be subject to interest and charges, some of which are huge. Work out exactly how much you'll need to clear each month to have it paid off by the end of the 0%, and stick to it.

After the graduate account expires, your bank will transfer you to its regular bog-standard bank account. See Best Bank Accounts for the top picks.

Don't miss out on updates to this guide Get MoneySavingExpert's free, spam-free weekly email full of guides & loopholes

Join in the Forum Discussion:
Top Student Bank Accounts
If you haven't already

What the * means above

If a link has a * by it, that means it is an affiliated link and therefore it helps MoneySavingExpert stay free to use, as it is tracked to us. If you go through it, it can sometimes result in a payment to the site. It's worth noting this means the third party used may be named on any credit agreements.

You shouldn’t notice any difference and the link will never negatively impact the product. Plus the editorial line (the things we write) is NEVER impacted by these links. We aim to look at all available products. If it isn't possible to get an affiliate link for the top deal, it is still included in exactly the same way, just with a non-paying link. For more details, read How This Site Is Financed.

Duplicate links of the * links above for the sake of transparency, but this version doesn't help MoneySavingExpert.com:

Cheap Travel Money

Find the best online rate for holiday cash with MSE's TravelMoneyMax.

Find the best online rate for your holiday cash with MoneySavingExpert's TravelMoneyMax.