Choosing the right Student Account (2008/09)

Posted by David | Filed under Student Saving Tips

Home > Student Index > Choosing the right Student Account (2008/09)

There are loads of student accounts out there trying to entice you to do business with them. There main way of doing this is by throwing lots of freebies at you!  The reason why banks market to students so much is that most people once they have a bank account remain loyal, and tend not to swap to get better deals as they graduate and then as they go into full time employment.

Below are two tables created for the main 2008/09 student accounts on offer, including the freebies and the more important information such as overdraft limit split per year of study.

It is important to also check with the bank you are going to chose what they think a student is! All the banks have their own definition, but if you go to University and are doing a Bachelor degree or a 5 year Medicine, Veterinary or Architecture course you will be fine as well.

Bank Unauthorised Overdraft (EAR) Formal Overdraft Limit
    Year 1 Year 2 Year 3 Year 4 Year 5
NatWest 17.81% £1250 £1400 £1600 £1800 £2000
HSBC 3% above their Base Rate. £1000 £1250 £1500 £1750 £2000
Barclays 8.9% £1000 £1250 £1500 £1750 £2000
Abbey 28.7% £1000 £1250 £1500 £1800 £2000
Royal Bank of Scotland 29.84% £2750 £2750 £2750 £2750 £2750
Lloyds TSB* 8.2% £1500 £1500 £1500 £2000 £2000
Co-operative Bank 15.9% £1400 £1700 £2000 £2000 £2000
Halifax 24.2% £3000 £3000 £3000 £3000 £3000

*Lloyds TSB also offer an Islamic Students account at the same rates

It is strongly recommended you do not go above the overdraft limits of your account! Despite the numbers in the table above, many banks have stepped overdrafts which prevent you taking that sum at one time, usually its around £500 in the first six months and the remaining later in the year.  Student accounts are not good for savers, if you are a saver consider an actual Savings Account as well as a student account. 

Lloyds TSB student account offers a “Save the Pennies” type of scheme putting all the “change” you have left after a transaction into a savings account for you. HSBC are also doing a scheme of 6.00AER interest on actual credit for the first year of their student account as well. My advice though would be if you want to save go get a savings account with something higher than base rate interest! Online accounts often have much higher rates, but be careful how much you lock up your money.

While high overdraft looks great, check out the charges if you do go into the unauthorised territory. They can be steep and they can be painful. HSBC do have a fair charging policy, and Lloyds TSB will forgive you charge wise the first time you go overboard! While RBS looks like a great overdraft it does have a very high EAR if you go over.

Freebies Table (Don’t use this to judge who to go for though!)

Bank Notable Freebies
NatWest
  • 5 Year Student Railcard
  • Free WebCam (Online Offer Only)
  • £50 3 Mobile broadband
  • £100 ASUS Voucher
  • £3000 Cash Competition
HSBC
  • 2 Years Worldwide Travel Insurance
Barclays
  • 6 Free Cinema Tickets
Royal Bank of Scotland
  • £100 ASUS Voucher
  • £50 3 Mobile broadband
  • £20 Payment Card Protection
  • 25% of gigs and shows
  • £24 Free Number Protection
  • Cinema 2-for-1
  • Microsoft Webcam (Online Offer Only)
Lloyds TSB
  • Up to £100 Cash
  • Free NUS Extra Card
  • 1 Years YHA Membership
  • 35 eMusic downloads

Don’t go for a bank because it offers lots of freebies! Unless of course you are happy you won’t be going into the deep red, then you can consider taking advantage. In particular you may like the NatWest railcard deal and Lloyds TSB £100 cash deal. Many of the others are rather gimmicky voucher deals. Just because a bank isn’t offering freebies doesn’t mean it doesn’t have a good overdraft amount. Beware though banks will commit you to a certain amount of money and to a certain number of transcations to get these freebies!

My Recommendations

My recommendations would be the HSBC, Lloyds TSB and the NatWest accounts currently. Although the Royal Bank of Scotland and Halifax offers look appealing. You will also find that HSBC and NatWest are likely to be one of the banks located in your student union making things more convenientfor you to pay in cheques etc. The young persons railcard in the case of NatWest makes it appealing especially if you use the train a lot.

Bank Websites can be confusing, reading through all the bank websites to get this information took quite some time, if you think I’ve made a mistake please get in touch.

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Permalink | Comments (2) | Thursday, 14th Aug 2008

2 Responses to “Choosing the right Student Account (2008/09)”

  1. 52 Student Saving Tips | David's Blog Says:
    August 15th, 2008 at 6:04 pm

    [...] Open up a Student Account, choose the one that will most suite you, click here for our article on choosing a Student Account. [...]

  2. And then it was Gone! | David's Blog Says:
    August 21st, 2008 at 10:36 pm

    [...] webpage in question was my popular article on Student Accounts 2008/09. There does appear to be a rival listing in the search engine now sporting some identical [...]

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