Are student bank accounts really worth it? The answer depends on whether or not you want to earn interest on your savings or any other perks are available with the bank account.
Student banking is becoming increasingly common across the United Kingdom (UK). This means they get access to special perks such as free cash withdrawals at ATMs, no fees for international transactions and even discounts on travel cards.
In today's post I am exploring what student bank accounts are as well as the best top student bank accounts you can apply for today.
I am not affiliated with any of the links in today's post. This is purely informational based of my research so feel free to explore the accounts I have shared and consider more options that may not be on this list.
What Is a Student Bank Account?
Student bank accounts are designed specifically for college students. These types of accounts offer many perks like no fees, free travel cards, discounts and cash back. However, students should take the time to compare each option and find the one that works best for them.
Some cards may not be worth it depending on their requirements and/or your situation. Taking the time to discover which will be most beneficial for you will help drastically.
Tips When Choosing a Student Bank Account
Student banking offers a wide range of options, including different types of accounts and providers. But it’s important to choose wisely and avoid getting caught out by hidden fees and charges. Here are a few things to look out for when selecting your next student bank account.
A lot of banks offer students free accounts, but beware of what you're signing up for. Some free accounts come with high monthly fees, while others require you to pay upfront for everything. There are some great deals to be had, but make sure you know exactly what you're signing up to before you commit.
Most banks charge a fee for opening a new account, but many will try to sneak in additional costs later down the line. Make sure you check whether you'll be charged for each transaction, such as withdrawals and transfers, and how much those transactions cost. You might even want to keep track of every single transaction you make to see if you're being charged unnecessarily.
Nationwide FlexStudent Account
The Nationwide FlexStudent Account is an ideal choice for students who need a flexible way to manage their finances. It comes with a number of benefits, including:
• Free ATM withdrawals
• No monthly fees
You also can apply to get up to £1000 interest-free arranged overdraft limit in your first year which goes up in the following years. Your account will need to have at least £500 paid in each term. Nationwide states that you must apply no more than 5 months before or 12 months after your course start date.
Learn more: https://www.nationwide.co.uk/current-accounts/flexstudent/
NatWest Student Current Account
The NatWest Student Current Account gives you access to similar benefits as the Nationwide FlexStudent Account.
To open your account, visit any branch or go online at using the link below. Once you’ve done so, you’ll get a welcome pack containing information about your account. You’ll also receive a confirmation email once your application has been processed.
Learn More: https://www.natwest.com/current-accounts/student_account.html
Barclays Student Additions Account
The Barclays Student Additions Account is another good option for students looking for a simple current account. The Barclay's Student Additions Account includes similar features to the student accounts above.
If you apply for there bank account before the 30th November they state you "could get a free 12-month subscription to Perlego - the UK's most popular e-book service for freshers"
Learn More: https://www.barclays.co.uk/current-accounts/student-account/
Halifax Student Current Account
The Halifax student current account is one of the best value for money student accounts available. This bank account has an interest-free arranged overdraft of up to £1,500 for the length of your course plus 3 years extra after you graduate.
You can also earn up to 15% cashback when you spend using your debit card and activate their Cashback Extras and there is also no monthly fee for maintaining the account.
Learn More: https://www.halifax.co.uk/bankaccounts/current-accounts/student-account.html
RBS Student Bank Account
The RBS student bank account is a great choice for students because it offers a lot of perks. For example, if you happen to forget your card or leave your wallet/purse somewhere, you can withdraw up to £130 without your card every 24 hours as long as it's within your daily withdrawal limits..
There are no charges for maintaining this account either and they also provide an interest free overdraft
Learn More: https://www.rbs.co.uk/current-accounts/student_account.html
HSBC Student Bank Account
HSBC has launched a student bank account offering customers free overdrafts of up to £3,500 per month.
The account allows students to borrow money against their future salary without having to pay interest. They can use the funds to cover unexpected expenses such as travel costs, rent, bills and mobile phone charges.
Students can access the account until they graduate, although they must still meet certain criteria. These include being enrolled full-time at university, studying towards a degree, and living away from home.
Learn More: https://www.hsbc.co.uk/current-accounts/products/student/
Lloyds Student Current Account
Lloyds also offers a student bank account. Their account comes with a number of benefits including a free debit card, which can be used anywhere in the world. There is also a free overdraft facility that can be accessed by making direct debits into the account.
They also offer a range of other services such as free SMS alerts, text banking, and a free app. Be sure to checkout their page to find out additional information
Learn More: https://www.lloydsbank.com/current-accounts/all-accounts/student-account.html
TSB Student Bank Account
The TSB student bank account provides a number of different benefits for students. It comes with a free debit card, so you can make purchases wherever you go. You can also set up direct debits to help manage your finances.
TSB gives 5% AER variable interest on balances up to £500, paid by the 10th working day of each month according to their page.
Learn More: https://www.tsb.co.uk/current-accounts/student-bank-account/
Summary
Student banks offer a number of perks that aren't available through other types of accounts. Whether you're looking for a way to save money or just want to enjoy some extra benefits, these accounts might be worth considering.
I am not a financial advisor and anything I say in my blog is not to be taken as financial advice. For any financial advice please contact a financial professional. My blog is based on my own opinions, research and understanding of the financial markets.
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FAQ
What is an overdraft?
An overdraft facility allows you to spend more money than you physically have. It's a bit like a credit card but far cheaper (or free in the case of many student accounts) – so long as it is arranged.
Source: savethestudent.org
Can I open more than one student bank account?
You can't open multiple student bank accounts with the same provider and some providers explicitly say that you shouldn't already have a student account when you apply (HSBC and Nationwide).
Source: which.co.uk
Will I get the maximum overdraft with my student bank account?
Not necessarily - most of these overdraft limits aren't guaranteed. Banks will assess your eligibility on an individual basis based on your credit score, so you may not get the maximum overdraft advertised amount.
Source: which.co.uk
When can I open a student bank account?
Most UK banks allow students to apply for a student bank account within six months of their course start date.
Source: savethestudent.org
Why do I need a UK student bank account?
Setting up a bank account might not be your priority right now, but it's important to research and understand why you need one.
Source: international-blogs.ncl.ac.uk
Why should I open a UK bank account?
If you plan to make any regular payments via direct debit (rent or household bills), or are receiving any support loans, we recommend you open a bank account in the UK. You can arrange to pay your tuition fees before opening a UK bank account.
Source: ed.ac.uk