It might not be quite as important as picking the right university or the right course, and it's definitely not the most exciting part of going to university, but choosing the right student bank account could save you money, as well as making your time at university and the first few years after you graduate run more smoothly. Read on to find out more.
What are the advantages of a student bank account?
The advantage of a student bank account is that it is specifically designed for the needs of students and to make the financial side of university life less of a trial. The biggest benefit of student accounts is the interest free overdraft that many of them come with. While you study, your overdraft will be interest free up to an agreed limit, which in most cases increases incrementally for every year of study. After you graduate, you will start paying interest on some or all of the balance of your overdraft. Student bank accounts also have other perks, like exclusive discounts, free gifts and dedicated student finance advisors.
Who can have a student bank account?
Each bank has slightly different rules about who will qualify for their student account. As a general rule, if you're studying full-time for a degree, a degree-equivalent or a postgraduate course, you should qualify. However, some banks will accept people who are on non-degree or other higher education courses - so if in you're in any doubt about whether or not you qualify, check with the bank.
What should I think about when I'm choosing a student bank account?
- How will you use your account? If like most students, you need to borrow some money to help you through university (in addition to your student loan) then the overdraft will be the most important thing to think about when you choose your account. You can get an interest-free overdraft of up to £3000, but don't automatically pick the biggest one - you should think about how much you actually need to borrow, and look at the interest rate you will eventually have to start paying too. If you don't need an overdraft, opt for the account which will pay you the most interest on your balance.
- What happens to the student bank account when you graduate? Don't forget to think about what happens to the account after you've finished university, for example how soon will you have to start paying off your overdraft, what rate of interest will you have to pay and whether will you get any extra perks or services as a graduate? However, remember that you aren't tied to your student account once you graduate, and you can switch to a different account if you find a better offer later on.
- What gifts or freebies are on offer? Many banks offer incentives like CDs, cinema vouchers, rail cards or cash in return for opening a student bank account. Don't be swayed too much by freebies - there's no point getting an account that doesn't suit you just because they give you £50 - it could end up costing more in the long-term.
- What other services are available with the student bank account? For example, what sort of debit card do you get and where can you use it? Can you get a student credit card from the bank?
- Is there a branch near your campus and does the account have online or telephone banking?
Compare student bank accounts now or find out more with our student finance guide.