Choosing the Best Student Account
(Last updated 2010/2011)
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% | £1000 | £1250 | £1500 | £1750 | £2000 |
| HSBC | 3% above their Base Rate. | £1000 | £1250 | £1500 | £1750 | £2000 |
| Barclays*** | 8.9% | £1000 | £1250 | £1500 | £1750 | £2000 |
| Santander | £5 per day, capped at 10 days per month. | £1000 | £1250 | £1500 | £1800 | £2000 |
| Royal Bank of Scotland | 17.81% | £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
*** At the time of writing Barclays have not fully decided on their student account deals, this is last years data. We will update this page once they have updated theirs!
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.
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 |
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| HSBC |
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| Santander |
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| Royal Bank of Scotland |
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| Lloyds TSB |
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| Halifax |
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| Co-op Bank | |
| Barclays |
Don’t go for a bank because it offers lots of freebies, most are fairly gimicky and are only there to entice you to join.
My Recommendations
I would recommend choosing the bank that is in your banks union for convenience sake if they have one! This will make paying in the cheques much easier. If you are going to be relying on an overdraft to pay for your time at university, then larger is obviously better, beware of the interest rates for going passed your agreed limit though, and make sure you read the small print, sometimes banks can ask for their money bank! An account that lets you pay back a year after you graduate would probably also be more beneficial if you are paying your entire way by overdraft!
If you have savings get an online savings account or save on the high street you will get a much better rate of interest than in a current or student account.
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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