Most of the major high street banks offer a student account with varying advantages and rates. The following article illustrates what overdrafts are available and other benefits on offer.
The Cooperative Bank: Student Current Account
The Cooperative Bank offers a £1400 guaranteed 0% interest overdraft in the first year, followed by a guaranteed £1700 in the second year, and finally £3000 in the third year. This is by far the highest available guaranteed arranged overdraft in any student current account, however it is still monitored by the bank dependent upon your bank activity.
If you borrow over your agreed limit, any further lending is at a very reasonable 9.9%
“It’s the only ethical bank on the high street, that’s my main reason for banking with The Cooperative” – Sam M, Manchester, Fourth Year Student
“I thought the need to have £300 in the account before your overdraft was activated would be a problem, but I just deposited my student loan into it!” – Shauna L, Derby, Second Year Student
Santander: Student Current Account
Offering a maximum £2000 0% overdraft by your final year, you first have to deposit £500 for the initial £1000 overdraft to become available.
The Santander Student Current Account offers many additional benefits, including mobile phone and laptop insurance (as long as you deposit £500 per term), and 1% interest on any balances up to £500.
“I’ve enjoyed using Santander as my bank, and I’ve experienced no problems. They’re very easy to deal with and I’ve got the right level of overdraft” – Peter S, Leeds, Third Year Student
“I enjoy the free laptop and mobile phone insurance as it saves me money by not going with an independent provider” – Shaun B, Oxford, Second Year Student
Barclays: Student Current Account
Barclays won ‘Best Student Account Provider’ (as awarded by Consumer Moneyfacts Awards 2011), and they offer up to £2000 0% interest overdraft. However it is important to note any arranged overdraft between £2001 and £3000 is charged at 8.9% interest.
Barclays, like Santander, offer many additional benefits to tempt potential customers. These benefits include free text alerts of your balance, a contactless debit card, free internet and mobile security, and discount on Student Travel Insurance, Student Possessions Insurance, and Lonely Planet Guidebooks.
“The size of the overdraft available to me was very useful, and helped me get through my first year” – Matt F, Leeds, Third Year Student
“The Barclays Student Current Account won me over through its independent awards, along with the plentiful number of additional benefits!” – Helena G, Cambridge, Second Year Student
Natwest/RBS: Student Current Account
Natwest & RBS Student current accounts offer very reasonable guaranteed 0% interest overdrafts, with the first year starting at £500 (Term 1), £750 (Term 2) and £1000 (Term 3). This is followed by £1250 in your second year, and £1500 in your third year.
No longer a benefit, but still worth noting as a word of warning. The infamous Natwest free Young Persons Railcard is no longer offered, both for new and existing customers, so please do be aware of this!
“I opened a Natwest Student Current Account under the impression I’d get a Young Persons Rail Card, however I later discovered this only applied to existing customers. I was disappointed I was not told this when I opened the account” – Dan H, Nottingham, Second Year Student
“My Natwest Student Current Account has been very useful while I’m in the UK, however when I’m abroad it certainly isn’t as useful due to the commission charges” – Alice J, Manchester, Third Year Student
“I really enjoy the very useful and accessible online banking that comes with Student Account” – Jake M, London, Third Year Student
HSBC: Student Current Account
The HSBC Student Current Account boasts the largest ‘up to’ overdraft limit, which stands at £3000. However you’re only guaranteed £500 initially, and any further increase must be requested and considered by the bank.
You will receive 2% interest on the first £1000 credited, but only when you’re in your first year.
“While I wasn’t guaranteed an overdraft above £500, I did not have any difficulties with upgrading this with the bank” – Stephen D, Bristol, Second Year Student
“I felt that by not having a ‘guaranteed’ overdraft that I was less tempted to go further into it, which was a big positive for me!” – Marcus L, Cardiff, Third Year Student
Halifax: Student Current Account
The Halifax Student Current Account is very similar to the HSBC account, insofar as you’re only initially guaranteed £500 0% overdraft, with any further increases considered upon request. Moreover, Halifax is renowned for charging the highest unarranged overdraft fees, which stand at 24.2% plus a monthly £28 fee and further potential £20 additional fees.
None stated, however our feedback suggests Halifax staff have generally dealt with students very well.
“I once went over my arranged overdraft by a couple of pounds, and I was charged an extortionate fee, even though my overdraft wasn’t at the highest it could have been” – Rachel O, Manchester, Third Year Student
“They’ve always been very friendly and helpful when I’ve been into a branch, and there are loads of branches!” – Tom D, Birmingham, First Year Student
Lloyds TSB: Student Current Account
Lloyds TSB offer an ‘up to’ £1500 0% overdraft in the first year, beginning with a guaranteed £500 in the first 6 months. This is then steadily stepped up, before reaching £2000 in your final year(s).
Lloyds TSB offers a free three year membership to the Youth Hostel Association, along with 40 free music downloads through eMusic and a free mini music speaker.
“If I go over my arranged overdraft by anything less than £10, then I don’t get charged like I would with many other bank accounts!” – Isabelle D, Manchester, Third Year Student
“I got up to £1500 of overdraft in my first year of university, which was a massive help in terms of my living costs” – Harriet G, Norwich, Second Year Student
A final note is that most banks want you to only have ONE student bank account so it is important to find the best account that suits your financial needs.
*All terms and conditions are correct at the time of publishing this blog entry