With the likes of Santander and HSBC offering a range of current account benefits, we take a look at some of the best banks for UK students
SoFi set out to make student financing better
Choosing the right current account to manage university finances is an important decision, and can unlock a range of benefits to help make the experience easier – here Andrew Fawthrop takes a look at four of the best banks for UK students
Attending university presents young people with a range of opportunities and important decisions to be taken – whether it is the subject they want to study, getting a part-time job, or finding the right accommodation to live in.
But once those big choices have been taken, there remain more pragmatic issues to consider – and learning to become financially responsible is a big part of the extra-curricular education most students will have to embrace.
Choosing a bank account is the first step in learning how to manage and be aware of personal finances, and a smart decision early on can go a long way to making life easier during those heady student years.
In 2017-18, there were more than one million new entrants to UK universities, and 2.3 million engaged in higher education institutions overall.
And with account switching levels low among students, according to a survey by finance website Save the Student, banks offer a variety of perks and incentives as they look to secure the custom of this large market.
As the lenders battle it out for new customers, young learners get the chance to benefit from things like interest-free overdrafts, discount cards and various types of membership.
In no particular order, here are the details of four of the best bank accounts available to UK students, and the benefits that can be unlocked by savvy scholars.
Best banks for UK students
Nationwide
The Nationwide FlexStudent account has been a favourite among undergraduates due to its sizeable, interest-free arranged overdraft facility.
First-year students can access a £1,000 overdraft, with this climbing to £2,000 in the second year, and £3,000 in the third – provided there are no significant credit score hiccups along the way.
There is no unarranged overdraft facility on the FlexStudent account, which means no danger of being charged fees – although the account will become unusable until the balance has been brought back under the original limit.
To remain eligible for all this, at least £500 must be paid into the account each term.
Nationwide student account holders will also receive 1% AER on balances up to £1,000.
Santander
A top perk of the student account from Santander is a free 16 to 25 railcard, giving a 33% discount on the price of train travel across Great Britain.
Upon opening a Santander 123 Student Current Account, a £250 fee-free arranged overdraft limit is immediately made available.
This can be extended to £1,500 for the duration of a three-year course, and £2,000 for those who continue to a fifth year.
However, to be considered eligible for the overdraft extension, students must register for online banking and pay in at least £500 per academic term.
Unarranged overdraft fees are capped at £50, while interest rates of 1% AER can be received on balances over £100, 2% AER over £200, and 3% AER on anything between £300 and £2,000.
HSBC
The HSBC Student Bank Account guarantees an immediate £1,000 interest-free arranged overdraft when opening an account, which can later be extended up to a maximum of £3,000 by the third year of studies.
The lender also has a credit card exclusively available to its student customers, which offers up to £500 credit, no annual fee, and a range of cashback options on purchases via a partnership with card issuer Visa.
Students won’t earn any interest through the HSBC account, although they are able to open a fixed-term savings account alongside it that could gather 3% AER on up to £3,000 – provided at least £25 is paid in each month.
NatWest
NatWest’s Student Current Account gives a £500 interest-free overdraft to students in their first term, and this can later be extended to a maximum of £2,000.
But to remain eligible, £750 must be paid in every six months, and at least three monthly transactions must be made on the account.
Students opting for NatWest are able to choose between three incentive schemes in reward for their custom – a year-long Amazon Prime Student membership, or four-years with either a National Express Coachcard or a tastecard, which offers restaurant discounts.