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Student Bank Accounts
Grab the top overdrafts and freebies in 2021
Updated 15 July 2021
Free 0% overdrafts and railcards – banks love reeling in new students with goodies, and this year's no different. This guide's about bagging the best deal.
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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.
Usually you'll open one after your A-Level or Scottish Highers results have come through and you have a confirmed place at university.
What ID do I need to open a student account?
As with all bank accounts, you'll need proof of address and identity. This can include: passport, birth certificate or current UK driving licence.
In addition, 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.
Top student accounts 2020/2021
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 former means you'll get it if you've been accepted for the account (and asked for the max limit), but the latter means you'll only get it if you have a good credit record.
With all these accounts you'll usually need to be (or about to be) a first year student and have proof of acceptance to a university or further education course, which is often defined as lasting at least two years.
Important. All the below automatically turn into a graduate account once your course ends, which continues the 0% interest overdraft for a further two or three years – though the interest-free limit drops each year. Diarise to check when your course ends though, as other top graduate accounts may beat it.
| The only account with a guaranteed 0% overdraft, plus get a free four-year railcard. The Santander 123* student account gives a definite £1,500 0% overdraft to all accepted, provided you register for online banking and pay in £500+ each term. Do that and you can also claim a free four-year 16-25 railcard (worth £90ish) which gets you a third off rail travel – though it's not valid in Northern Ireland. You'll be sent a code to use on the railcard site within 60 days, so don't forget. | |
|
0% overdraft: - Year 4: £1,800
Perks: - Four year 16-25 railcard |
| Top for freebies (£100 in cash and vouchers) and a higher possible 0% overdraft – though it's 'up to'. First-year university students or apprentices can get the HSBC student account which offers a free £80 + a £20 Uber Eats voucher or Asos Premier (unlimited next day delivery) for a year. You'll need to apply by 31 Dec 2021 and use your debit card five times in the first month to get it. However the 0% overdraft is an 'up to', so the limit you'll get depends on your credit record. | |
|
0% overdraft: TABLE_CELL_STYLE - Year 1: up to £1,000 - Year 2: up to £2,000 - Year 3 & beyond: up to £3,000 - Free £20 Uber Eats voucher or Asos Premier for 1yr |
An alternative account to HSBC that offers large 0% overdrafts, but it's another 'up to'. The Nationwide FlexStudent has no intro freebies but offers the joint-highest 0% overdrafts – starting at £1,000 and rising to £3,000 in year three – provided you pay in £500+ per term (eg, maintenance loan). However, like HSBC above, it's 'up to' so the amount you get will be determined by your credit record. |
|
|
TABLE_CELL_STYLE 0% overdraft: - Year 1: up to £1,000 - Year 2: up to £2,000 - Year 3 & beyond: up to £3,000 |
Important. You'll need to stay within your overdraft limit. If you exceed it, all these accounts will restrict access until you get the balance back under your limit – so no debit card spending or cash withdrawals. All accounts have full FSCS up to £85,000 savings protection, though note HSBC is shared with First Direct and Santander shared with Cahoot.
Other student accounts
These accounts aren't our top picks as the 0% overdrafts are not as generous as the ones above and/or the perks aren't as lucrative – though don't be swayed by a freebie if it'd mean a lower overdraft.
Next best student accounts
| Lender | 0% overdraft amount | Main perks |
|---|---|---|
| Bank of Scotland | Up to £1,500 in years 1-3, then up to £2,000 | Cashback when you spend at certain retailers |
| Barclays | £500 in term 1, then up to £1,000 in the rest of year 1; up to £2,000 in year 2; up to £3,000 in year 3 | 12-month subscription to Perlego, which gives online access to textbooks & other reading material |
| Halifax | Up to £1,500 | 0.1% interest, plus cashback when you spend at certain retailers |
| Lloyds Bank | Up to £1,500 in years 1-3, then up to £2,000 | Cashback when you spend at certain retailers |
| NatWest | £500 in term 1, then up to £2,000 for the rest of your time at uni | £50 cash and a 4 year tastecard |
| Royal Bank of Scotland | £500 in term 1, then up to £2,000 for the rest of your time at uni | £50 cash and a 4 year tastecard |
| TSB | Up to £1,500 (guaranteed £500 for the first 6mths, up to £1,000 in months seven to nine, and up to £1,500 from month ten) | 5% interest on balances up to £500 |
Table in alphabetical order. Last updated July 2021.
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For that rare student breed, the ones who are always in credit, there aren't many choices (even if you're occasionally overdrawn, go for the top overdraft deal).
But, if you don't need your overdraft, there is a way to make it make money for you (though with rock bottom savings rates, it's not going to be much). Here's how to do 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.
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 + employment earnings + money from family + any grants/sponsorship money, 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 guide for more on fees and funding.
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