Apr 08

A guide to choosing the best student bank account

Reading Time: 4 mins

Choosing the right student bank account is one of the most important decisions you make before going to university.

Not only will you be relying on this bank for most if not all the money you spend whilst at university, but you will also be relying on them to help you out if you lose your debit card, get defrauded or stolen from.

With money being so tight as a student you must ensure that the bank you choose has enough benefits and as few issues as possible. Below are five things to consider for getting the best student bank account for you.


1. Overdrafts

A guide to choosing the best student bank accountThe basic concept of an overdraft is that you have an extended line of funds on top of the money you actually own and put in the account. This money is known as the overdraft and is a 0% interest loan, meaning you don’t pay extra fees while you use this money. This feature of 0% interest exists only within student accounts and is something which can be used quite effectively for your own benefit.

This tip is very simple, get the biggest overdraft you can. Your parents and relatives may caution you that having the biggest overdraft will encourage you to spend all the money and you’ll end up even more in debt but this isn’t necessarily the case.

The reason you want to get the biggest overdraft you can is that you can use it to actually gain a little more money passively. The way to do this is to take some of the interest free money out of your student account and transfer it into your savings account. What this does is earn you an increasing amount of interest with your personal savings account. With some overdrafts going up to £3,000, you could take £1000 or more of that and earn interest on it.

Make sure you pay it all back though as your 0% free loan doesn’t last forever and will start to add interest a few years (depending on the bank) after you graduate. Also, do not exceed your overdraft limit; you may get some rather unsightly bank charges.


2. Know the Repayment Conditions

This may sound obvious, but you’d be surprised how small the proportion of students who actually know these conditions is. While it probably seems a long way off, especially if you’re not actually at university yet, it soon creeps up on you. You don’t want to have graduated and then get letters saying you owe the bank £3,000.

The best thing to do is make sure you read all the repayment conditions before you choose a student bank account and ensure that these conditions are actually realistic for you. Plan ahead and be honest with your financial future.

Some student bank accounts have the option to change into a graduate bank account, which also changes the conditions of your repayment, which is yet another avenue to research for when you graduate.

All of this research will pay off, don’t worry.


3. Don’t get Sucked in by the Freebies

A guide to choosing the best student bank accountThis is more difficult than it sounds.

With each student account the bank usually offers an incentive to beat the competition to your money. The freebies range from railcards to NUS extra cards to Amazon vouchers. The issue with these alluring treats is that it may distract you from what really matters, namely the overdraft limit and whether it has any additional charges or fees.

Don’t let your mind take the initial satisfaction of the free stuff in place of getting the big overdraft and profiting from it in the long run. £60 of Amazon vouchers isn’t much if you’ve lost £1000 on your overdraft limit. Be strong.


4. Familiarise Yourself with your Credit Rating

Getting to know you credit rating sounds a little daunting, but it is an essential piece of information for securing the best account you can get.

Banks dish out their student overdraft limits based on the prospective students’ credit rating, which is based on spending habits, past borrowing, how much money you earn and a few other minutiae. For you to be successful in your procurement of a student account you have to fulfil certain criteria which the individual banks individually choose.

To find out your credit score you can use services like Credit Expert or Experian. Either way, it can help you make the whole process a little more streamlined; by not going to banks which you know won’t offer you a big enough overdraft you save yourself some time.


5. Local isn’t Always the Way

A guide to choosing the best student bank accountIt seems perfectly logical to choose a bank which you know will be close by and on campus at your university. However, restricting yourself to this reduced number of banks means you might be missing out on better and more convenient options in the long run.

However, one thing to consider is that if you lose, break or for some other reason, cancel you debit card, you will not be able to take out cash in-house if there isn’t a bank there to do it in. This is obviously less important than getting the best account possible, but it is something to consider. Most university towns and cities have nearly all banks within a reasonable distance; you just have to put in the effort.


The process of choosing the right student bank account for you must be exactly that, right for you.

If you know you haven’t got the will power to have a larger overdraft or for some other reasons don’t want to put your extra overdraft money in a savings account, you don’t have to.

Make sure that you tailor the bank as well as the account to what you want. Write down a list of the criteria you want in a bank and a bank account and find the one which fulfils the most. To check out the best accounts of 2016 click here.

To find the best bank for you try our comparison tool here.

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Maxine Chivers
Maxine Chivers

Why not have two bank accounts? I recommend the TSB Classic Account for 5 percent interest and the Halifax Reward Account which gives a reward of £5.00 a month. Then have a separate savings account. I like to have a Regular Saving Account which pays 5 or 6 percent interest.


Really good idea. There’s nothing to say you can’t have more than one account if your credit is good enough and you can put the required amount in each month.

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