What are the Benefits of Having a Student Bank Account?

When preparing for university, one thing you may not think about is getting a student bank account. Your student bank account will share similarities with your regular bank account. However, they are primarily aimed at university students. The majority of banks offer student bank accounts, including Nationwide and Barclays and these can be set up either online or in store.

There are several benefits to having a student bank account. You will have access to many student deals and 0% interest when using one. A student bank account will also help you to organise and budget your own money for study as well as your student loans. This means that you are more likely to use your money responsibly.

In order to understand more about what a student bank account is and how to set one up, I recommend you read the rest of this article.

Is it worth getting a student bank account?

Simply put, yes. Student bank accounts are definitely worth it.

A student bank account is a current account which is primarily for students within higher education at university. The purpose of the account is to be student friendly to help you manage and organise your finances during your studies at university.

University is definitely expensive. Check out this Think Student article to discover why. Therefore, a student bank account could be very useful! Not just for you, but your family too!

Not every student will choose to get a student bank account. However, it is something you should consider. Students that do get one often use the account for their maintenance loan (available if they are living away from home).

Later in this article I will discuss which banks offer student bank accounts and which banks offer the best value. You can apply for a student bank account either online or by going into your local branch.

If you decide not to open a student bank account or would like some additional support, check out this helpful Think Student article about tips to budget as a student.

What benefits do you get by having a student bank account?

There are a range of different benefits that students will gain access to when opening a student bank account.

Firstly, banks offer a range of incentives for you to open a student bank account with them. As of 2022 some banks such as Nationwide offer £100 to students if they open an account, whilst Santander offers a free railcard to get one-third off rail travel.

Other banks offer a taste card which last up to 4 years as well as free products. However, whilst these are appealing, you should be sensible when choosing, focusing on the benefits of the account itself.

Another benefit of a student bank account is that they usually come with interest free overdrafts. This is a massive benefit as normal current accounts do not offer this.

This means that you will only pay back what you borrow, nothing extra.

Therefore when looking for a student bank account, you should opt for the biggest overdraft you can. Accounts with banks such as Nationwide offer students a 0% overdraft.

Click here to check out the Nationwide website for more information on this.

Student bank accounts can be beneficial in helping you to organise your money during your studies. I myself have a student bank account with Nationwide and I prioritise it for my maintenance loan.

My loan is paid into this account in three lump sums over my year of study.

My university accommodation team then take my rent money from my student bank account. This helps to ensure my rent money and student loan remain separate to my own savings.

This is extremely helpful, as university accommodation can definitely be expensive. Check out this article from Think Student to discover why.

What’s the difference between a student bank account and a normal one?

There are some key differences between a student bank account and a normal one.

Firstly, a normal current bank account does not have interest free overdrafts compared to a student account. This means that whenever you use money out of your overdraft, you have to pay interest. The interest is usually up to 40% added on top.

In comparison, student bank accounts have interest free overdrafts. This means that however much money you use from your overdraft, you will always pay that exact amount back and no additional interest on top.

For a normal current bank account, banks will usually allow you to open an account without a deposit. Whereas, banks will generally require students to deposit up to £500 in order to open a student bank account.

Finally, most current accounts will remain the same. Instead, a student bank account can become a graduate account once you graduate from university. With this account, you can then access new rewards and benefits.

For more information about a graduate bank account, check out this useful Money Helper article.

Which student bank accounts are available?

There are a range of student bank accounts out there. However, as always, some will be better value. As a student your money is precious. Therefore, you should always do your own research before deciding on which bank account to choose.

For example, check out this page on the UCAS website to learn how to choose a bank account.

The majority of your high street banks, such as Barclays, Nationwide and NatWest offer student bank accounts. There are also banks such as RBS, TSB and the Co-operative bank which offer student bank accounts.

When deciding on which bank to open an account with, there are some things you should check. Firstly, you should check the size of the overdraft, particularly whether it has 0% interest as well as the amount you can access. This is usually between £1000 and £3000.

Likewise, you should look at the reputation of the bank such as the customer care by looking at google reviews.

Finally, you should check the terms and conditions of opening up the student bank account. Some banks may only offer student accounts to current customers who are already banking with them. Likewise, you should check whether you eligible for the rewards on offer for opening the account.

For more detail on which student bank accounts are best for 2022, check out this helpful Save the Student article.

Likewise, you can find and compare the different banks on this finder.com website.

How do you apply for a student bank account?

You can either apply online or go into your local branch. If you are still deciding on whether to get a student account, most banks will have leaflets in store or pages on their website with all the relevant information.

Likewise, you can contact the bank by phone or visit in person to discuss opening an account with someone.

To apply either online or in person, you will need a form of ID, proof of your address and proof of your acceptance to a university (such as an acceptance letter).

In order to make the process quicker, you should access your two personal status codes from UCAS. After completing you applications to universities, UCAS will provide you with two personal status codes which are unique to you.

When you are applying for a student account, you can enter these codes. This will add information about your chosen course and university as well as your personal details which will speed up the application process.

Using the UCAS codes, the entire process should only take you around 15 minutes to complete. In order for the account to be activated, some banks ask for a minimum of £500 to be deposited. Likewise, you may need to make a transaction with your bank card.

A student bank account can be very beneficial during your studies. It can be an effective way to organise your money and student loans.

Likewise, you may be entitled to discounts, a railcard and even free cash just for opening an account! However, there are other ways to effectively manage your money whilst you are at university.