What is the best student bank account?

Managing your money well is a key part of student life. Whether you’re living on a maintenance loan, working part-time or getting some help from family, having the right current account will give you extra financial support. But there’s lots of choice out there.

You might be looking into a student bank account for the first time or considering a smart switch. Either way, this article will give you advice on choosing the best bank accounts for students.

What are student bank accounts and why should you have one?

Student bank accounts are current accounts specifically designed to support young people in higher or full-time education. In a lot of ways, they’re the same as a standard bank account, but some can offer extra benefits to help you with your budgeting. Like interest-free overdraft limits and freebies, discounts or perks—nice!

Some common benefits of student bank accounts can include:

• 0% interest overdraft limits which increase with each year of study. This makes an accidental overspend less of a stress and gives you wiggle room before your next maintenance loan drops
• Extras, such as discount cards, freebies or railcards for cheaper travel
• Cashback on certain purchases, meaning you get a little bit of money back each time you shop

The best student bank account for UK students might not be ideal for international students or postgrads, so check the small print before you apply.

How to choose the right student account

To compare student bank accounts, you need to look at the main features of each option. You also need to consider the eligibility criteria to make sure you’re likely to be accepted if you apply. The main elements to think about are outlined below.

Choose the largest overdraft

All student accounts will have an interest-free overdraft limit. This allows account holders to spend more than their actual balance without having to pay any extra fees. This is useful if there are long periods between each maintenance loan payment.

There are two factors you need to consider when reviewing the overdraft limit:

• The amount and whether it progresses as you move through higher education. For example, some accounts will set a limit of £1,000 in year one, £2,000 in year two of study, etc.
• Whether the limit is ‘guaranteed’ or ‘up to’. If it's ‘guaranteed’ it means you’re sure to get the whole amount. ‘Up to’ limits mean the bank will approve an overdraft limit ‘up to’ the maximum amount, though it could be less based on your credit score

Check the repayment terms

Just because you have an interest-free overdraft doesn’t mean it gets written off as soon as you graduate. By paying it off before you leave university, it’ll still come under the 0% interest terms and you won’t be charged extra fees.

Certain accounts will give you a limited amount of time to pay back after you graduate without incurring extra interest charges. Check this to get the maximum amount of leeway and avoid an unexpected bill.

Be careful with ‘perks’

Many banks offer freebies or discount cards with their student accounts to encourage people to sign up. First, consider whether you’ll use these benefits. Do you travel by train enough to make a railcard worth it, for example?

Student accounts with perks we think are particularly good rn:

The Co-operative Bank

The Co-op’s Student Bank Account offers an interest-free overdraft starting at £1,400, with the option to request an increase each year. You also get a year after you finish your course to pay back what you owe.

• Students taking NVQs, BTEC Higher National Diplomas and foundation degrees are also eligible
• Exclusive access to savings accounts including an Online Cash ISA when you open a student account
• Co-operative Bank does not offer services to businesses involved in fossil fuel extraction, supports organisations such as Amnesty International and has a customer-led Ethical Policy

Santander

The Santander Edge Student current account offers an interest-free arranged overdraft of £1,500 for the first three years of study. This rises up to £2,000 if you study for five years and is available to level four to seven apprentices as well as undergrads.

• A free four-year Santander 16-25 Railcard offering up to a third off train ticket prices
• No fees are payable when you use Santander cash machines abroad
• Access to Santander Boosts which include cashback, vouchers, prize draws and personalised offers

HSBC

An arranged interest-free overdraft of up to £1,000 is available when you apply for an HSBC Student Bank Account. This can rise up to £3,000 by year three of study.

• Get a 5% AER rate if you open a Regular Saver account alongside your Student Bank account
• Access to a mobile banking app with lots of helpful money management tools, including instant notifications for transactions or overdraft alerts, spending insights and Balance After Bills
• Enjoy discounts with a home&Away offers programme and access to exclusive savings accounts

NatWest

NatWest’s Student Bank Account offers the highest interest-free overdraft limit of up to £2,000 from year one, though this is restricted to £500 in the first term. From year three, you can apply for a limit of up to £3,250 interest-free.

• An account with no monthly fees from an award-winning bank (YourMoney.com, Best everyday current account provider)
• A free four-year tastecard which gives you discounts on meals and tickets to attractions and the cinema, worth £29.99 per year
• Access to the Housemate by Natwest tool which allows you to split bills and pay each other back more easily

Nationwide

With Nationwide’s FlexStudent current account, you can apply for up to £1,000 interest-free overdraft limit. This rises by £1,000 every 12 months up to your third academic year, although there are strict usage terms.

• Automatically switches to a FlexGraduate account after you leave education, with the option to apply for interest-free arranged overdrafts
• Nationwide membership with access to exclusive savings accounts, the opportunity to be involved in Community Boards and nominate charities to get support from the bank
• Spend with a Visa contactless debit card, ApplePay, GooglePay or SamsungPay

What do you need to open an account?

To open a student current account, you will need to following documentation:

• Official ID, such as a passport, driving licence or birth certificate
• Proof of the address you’re opening the account from, this can be a utility or council tax bill
• Confirmation of your place in full-time education, this can be a letter of your conditional or unconditional offer or your UCAS code

It’ll also help to know your credit score, as this will be taken into account by the bank when you apply.

People taking apprenticeships, BTECs or other higher qualifications will be eligible to apply for certain student accounts. As long as you have confirmation of your place in education, you’ll be able to get set up. It’s recommended you do this as soon as possible to make sure you can get your Student Finance fixed and sent to the right place.