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Picking a student current account – what you need to know

Tom Bailey

Tom Bailey
Feb 16, 2017

If you’re a student or are just about to start university, what type of bank account to get is probably the last thing on your mind.

But while you may be more concerned with reading obscure French philosophers and drinking supermarket own-brand alcohol, where you keep your money is also important.

Many banks offer accounts tailored specifically to students – some with quite generous terms.

Here's what to ask before choosing a student account: 


Does the account have a 0% overdraft?

Any student account should have a 0% overdraft.

Don’t settle for anything less.

Going into the red is a normal occurrence when you’re a student and the last thing you want is for overdraft penalty fees to rack up while you wait for your next student loan instalment.


What are the free perks?

Many accounts also offer free joining or account user perks. While not the most important factor in choosing a bank account, they are always an bonus for students.

Some can save you a serious amount of money.

Some, for example, offer a free Young Person’s Rail Card, giving users a third off train travel. Perfect for when you need to go home for Christmas or visit a friend at another university.


What is the interest rate?

It’s worth thinking about the return you’re getting on your bank balance.

Students normally focus on their actual balance and are less likely to worry about any interest they are accruing.

That’s understandable. However, even if only a small amount, the amount of interest earned is still worth considering.   


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Does it have an associated credit card?

This can either be good or bad, it really depends on what kind of student you are.

For some, having an associated credit card linked to the account is a good idea, allowing for quick access to credit in times of emergency.

But for others, it’s is not a good idea. This easy access to credit may be too tempting, leading to potentially disastrous results.


When can you join?

Many banks only allow you to become a new student account holder in the first year of study.

However, this often varies.

Some only allow accounts to be taken out in the first few weeks of the start of year one, although many also allow you to switch to a their account from another bank’s student account.

Take a look at our top picks for student accounts below.



Nationwide FlexStudent

Nationwide offers a fee-free overdraft of £1000. This increased every year by £1000, if requested and approved, potentially giving students a £3000 fee free overdraft by their third year of study. To be eligible, students must pay in at least £1,500 per year of study. across two or more transactions. A student living loan, for instance, would cover this. You also can switch to this account anytime while a student, so long as you already hold another student account at another bank.
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HSBC student account

HSBC offers a decent overdraft of £500. This can, if the user is eligible, rise to £3000. The interest rate on balances up to £1000 is 1.5% higher than the base rate, which is better than many student accounts. The account is also open to any customer if they are still on the first year of their university course. It also offers cashback on transaction, including Amazon purchases and coach travel. However, anyone beyond their first year is no longer eligible to become a new customer.
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Santander 1|2|3 Student Current Account

Santander offers a fee-free overdraft of £1500 for students in their first to third year with the bank. This can later rise to £2000 if the account holder stays on for five years. A good option for those hoping to end up doing a PhD! Santander users also get a young person’s rail card for free. Although the account offers 3% AER interest, this is only on balances starting at £300 (however, the max interest can be accrued on his higher than most, standing at £3000).
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