Student Bank Accounts
Grab the top overdrafts and freebies in 2018/19
Railcards, 0% overdrafts and vouchers; 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 your finances.
What is a student account?
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.
To be accepted you'll need a UCAS confirmation letter with an unconditional offer or, if your offer's conditional, A-Level results that meet that condition, or a letter from the university you'll be attending confirming your place. As soon as you've got these, you can open an account, allowing you extra time to make full use of its benefits before the start of term.
A student account's just the tip of the iceberg when it comes to finances at uni – for more help, take a look at our 10 Student MoneySaving Tips guide.
Quick questions
The student account need-to-knows
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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.
Student bank accounts with 0% overdrafts
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 £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, £2,000 in year 2 then £3,000 NatWest Up to £500 in term 1, then up to £2,000 Royal Bank of Scotland Up to £500 in term 1, then up to £2,000 Santander Up to £1,500 in years 1-3 then up to £1,800 in year 4 and up to £2,000 in year 5 TSB Up to £1,510 Last updated August 2018.
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.
Top student accounts 2018/2019
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.
Big guaranteed 0% overdraft which increases with your year of study to a max of £3,000
The Nationwide Building Society FlexStudent account is one of our top picks for large 0% overdraft limits of £1,000 in year one, £2,000 in year two and £3,000 in year three.
These are guaranteed amounts that you will get if you choose to – as long as you pay in at least £500 per term (eg, your maintenance loan/cash from parents) and don't have credit problems.
If you know you won't need the full overdraft, the accounts above and below may be better, as they also come with freebies.
0% overdraft: Year 1: £1,000, Year 2: £2,000, Year 3 & beyond: £3,000
Unarranged overdraft fees: N/A (you won't be able to use it until you get the balance back under your limit)
Savings protection: Full
The HSBC Student account offers first-year university students and apprentices a guaranteed £1,000 0% overdraft in year one.
You have the option to increase the 0% overdraft to up to £2,000 in year two and up to £3,000 in year three, though those amounts aren't guaranteed.
0% overdraft: Year 1: £1,000, Year 2: up to £2,000, Year 3 & beyond: up to £3,000
Unarranged overdraft fees: N/A (you won't be able to use it until you get the balance back under your limit)
Savings protection: Shared with First Direct
The Santander 123 Student* account gives full-time students and apprentices a four-year 16-25 railcard (worth £90ish) which gets you a third off rail travel.
You automatically get a £250 0% overdraft when you open the account, then get an 'up to £1,500' 0% overdraft for three years, though it's judged on a case-by-case basis. To get the railcard and 0% overdraft above £250, you must pay in £500/term and register for online banking.
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 the account opening.
0% overdraft: Years 1-3: up to £1,500. Year 4: up to £1,800. Year 5: up to £2,000
Unarranged overdraft fees: £5 daily charge (max £10/month), paid/unpaid fees: £5/£10 per item. Max monthly charge of £50.
Savings protection: Shared with Cahoot
For 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.
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.
With people who work it's an easy message:
You shouldn't spend more than you earn.
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 cashflow 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 2018/19 guide for more on fees and funding.
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