For many people, one of the major changes as they head off to university is the fact that they will be handling their own finances. If you move away from home, there are all sorts of new things to think about. Anything from rent to food shopping to night out will need budgeting. Luckily, many banks have dedicated student bank accounts offering various perks to help you through the process. However, it can be difficult to know exactly which one to choose.
This article has a full guide to some of the best student bank accounts in the UK. Keep reading to find out what different banks are offering, to get a better idea of which one might be best for you.
How do you choose a student bank account?
There are lots of things to consider when applying for a student bank account. The first thing you need to check is whether you are eligible for this type of bank account.
You will normally need to be in, or about to start, your first year of an undergraduate degree course. This means that it’s worth doing your research early – you don’t want to wait until your final year! Once you have an unconditional offer, or a confirmed conditional offer, most banks will let you apply.
If you are an international student, getting a student bank account can be a little more complicated. Most banks require you to have lived in the UK prior to applying. In this case, it’s worth checking out accounts specifically for international students – for example, this page from HSBC has more about their international student accounts.
For example, if you look at one bank offering a 0% overdraft, you may assume this is the best deal. However, this is something common to all student bank accounts – more on overdrafts later in this article!
Additionally, nearly all of them allow you to have a student credit card. Have a look at this Think Student article for more on credit cards.
Often, opening a student bank account will come with one-off bonuses. These should not be the deciding factor when choosing an account, but they can be a nice addition! Just remember that the banks have the right to change them each year.
The perks mentioned in this article are from 2022, and while many of them will stay the same, be sure to double check official bank websites before opening an account.
1. Santander 1|2|3 Student Account
Santander’s student account is generally regarded as one of the best options for university students. In a survey by the site Save The Student, it had the highest student score.
This page from their website contains plenty more information about this, as well as many other student bank account options, and advice on choosing the best one for you.
To apply for this account, you must be 18 or over, living in the UK, and in (or about to start) the first year of an undergraduate course or level 4-7 apprenticeship.
You must also pay at least £500 into your account each term – for most students, this will be their maintenance loan. For more information on opening a student bank account with Santander, have a look at this page of their website.
Santander also offers a considerable interest free overdraft. An overdraft is essentially when you spend more money than is in your bank account. This can keep you going if you are tight on money before receiving your maintenance loan.
This money needs to be paid back – the unique thing about student accounts is that you do not need to pay interest when repaying money you have overspent.
Santander offers an overdraft limit of £1,500 per year for a three-year undergraduate course. If your course is longer, the limit increases to £1,800 in year four and £2,000 in year five. While this can be a nice safety buffer, remember not to treat it as free money – it will need repaying, so should only be used if necessary.
Finally, Santander offers a few extra perks for their customers. When you join, you get a free 4-year railcard, which is worth around £100 and saves you ⅓ off train tickets across Great Britain. This can be especially handy to travel home and visit family. As well as this, their ‘Santander Boosts’ programme includes discounts on a range of services, and cashback on certain purchases.
2. HSBC Student Account
Another highly recommended student bank account is offered by HSBC, also in the top three from Money Saving Expert. Once again, they require you to be 18 or over, and have a confirmed place at a university in the UK to apply.
Check out this page from the official HSBC website for all the information about opening a student bank account with them, but the important things are summarised here.
In your first year of university, your interest-free overdraft limit is £1,000. This is slightly lower than at Santander, however, it increases each year. At HSBC, your overdraft can be increased to £2,000 in the second year, and £3,000 in the third year.
Just be aware that you have to specifically request an overdraft increase, and if you haven’t been using your account responsibly (for example, spending more than your overdraft limit), you may be declined. Have a look at this Think Student article for tips on budgeting as a student, to help responsibly manage your finances.
HSBC also offers a bonus of £100 for joining their bank. Their website also advertises discounts for student bank account holders, at popular retailers like Costa Coffee, ASOS and Boohoo.
3. Nationwide FlexStudent Account
Nationwide offers a very similar student bank account to HSBC. Their eligibility criteria are fairly standard – you need to be 18 or over, living in the UK, and starting an undergraduate course.
Additionally, £500 needs to be paid into the account each term, usually in the form of your maintenance loan.
Nationwide has the same overdraft limits in place as HSBC. You can ‘borrow’ up to £1,000 in your first year, £2,000 in your second year, and £3,000 in your third year – all interest free. They also offer the same sign up bonus of £100.
The Nationwide page on student accounts, which you can find here, also advertises their system of repayments once you graduate. Many students pay back a significant amount of any overdraft once they graduate and start earning full-time.
Nationwide’s system is tiered, so you still get an interest-free overdraft each year, but the limit decreases. This can be a great way to transition from university finances to the working world.
Nationwide is ranked as the best all-round student bank account by this article from thetimes.co.uk. It praises their overdraft limits, tiered repayment system, and customer satisfaction. However, it does also note that Nationwide offers fewer perks than other banks, such as Santander’s railcard.
Many different websites will rank the accounts available differently, because the decision is subjective. For example, NatWest and the Royal Bank of Scotland are highly recommended by some, but not mentioned by others.
Ultimately, you will need to compare the pros and cons of each bank account to find the right one for you.
If you know you are likely to struggle with paying the bills at university, a generous overdraft might be more important. If you plan on getting the train home every couple of weeks, a railcard might sound more appealing.
Hopefully this article has given you a good overview of the sort of student bank accounts available and help with choosing the best one.