[Owen]

Banks want you, more than any other group of the population. Students are essentially investing in themselves to get a high paying salary when they graduate. Whilst you may be borrowing now to fund your education, banks expect that in the near future you will reap the rewards. They are looking to establish loyalty, and have good odds at keeping you for life once you've opened with them. And loyalty is also an important tool for the consumer, meaning students get the best deals and offers out there! Just remember that you don't have to be loyal, and you should switch around banks to sweep up the next best deal. It may look like effort, but it can pay dividends.

Also, try not to be taken in by freebies. A free MP3 player worth £20 is nowhere near as good a deal as getting an interest free overdraft. An overdraft is a way of borrowing money, up to around £3,000 for final year students. With an interest free overdraft you pay nothing more than what you borrow, and this is pretty much exclusive to us students.

So even if you are lucky enough to have the means to pay without borrowing, it can be worth getting an overdraft. Take it out and pump up your savings account, earning interest on the borrowed money whilst your a student.

Beware that the 0% period is not forever! It only lasts a certain period before it hikes up and you need to pay up, or get screwed. Just as important, don't go over your limit or you could suffer heavy bank charges. Also, it's worth noting that the advertised overdraft limit is the maximum you can get, and usually only in your third year at university. It largely depends on your 'credit score', which you can check here. When you first open your student bank account you are likely to get around half of the advertised overdraft.

With that in mind, here are the current top student bank accounts taking the overdraft interest free period into account.

Top Student Bank Accounts 2009/2010

#1 Halifax / HBOS

For the second year running, Halifax is in first place by offering the highest interest-free overdraft limit. The student account offers an overdraft of up to £3,000. Although in your first year you are unlikely to top £1,000. When you apply, you automatically get £500 overdraft, you need to ask for more. The actual amount you get will depend on your credit rating (check yours for free). You have one year after graduation to repay before interest is added. Don't forget!

You can also open the account with the Bank of Scotland, because they're part of HBOS.

#2 Royal Bank of Scotland

Royal Bank of Scotland has stormed into second-spot this year, offering an impressive £2,750 overdraft at 0%, which is just below Halifax's student account, but RBS also throw in a 3-year railcard (worth £65) which will save you 1/3 on all rail travel. Like the others, the overdraft limit is an 'up to', in your first year you should expect to get closer to £1,250. On top of this you also get a 4GB memory stick by applying online, and a generous 1.02% pa interest on any balance you have in credit. If you go for this, let us know how you find it.

#3 NatWest

The next offering is from NatWest who advertise £1,250 to £1,600 0% overdraft to students, over a three year period. However, the overdraft is actually pretty meagre in comparison to the competition. The main attraction for students applying for NatWest is they give you a free 5 year Young Person's Railcard (worth £120). This is one freebie that maybe worth taking. The railcard will save you 1/3 on all rail travel in the UK, which could add up to £100s if you use the trains regularly.



They also have several other 'special offers' to seal the deal with freebie loving students.

#4 Lloyds TSB

£1,500 interest free overdraft, with free NUS Extra card. Again, with a few 'offers' and minor freebies.


Remember the top student bank accounts change each year, so make sure you're still getting the best deal as an existing student.

Other factors to consider

Does it come with a debit card or a cash card? You can withdraw from ATMs with both, but only pay in shops or online with a debit card.

Can you access your account online?

Have a look over the bank charges.

Branch location. A local bank can prove be worthwhile, especially on that rare day when you want or need to make a cash or cheque deposit. These banks have branches in and around the university campus:

* Barclays
* Halifax (HBOS)
* Lloyds TSB
* HSBC
* NatWest

Don't be afraid to ask any questions you may have, and please share your own experiences with student banking!

This post will be updated to keep up with the current best student bank accounts.

[cjsalford]

Just wanna add about the Natwest. Salford Uni branch is useless. They dont know their own products, brand or procedures.

I've just moved to the Co-Operative Bank, £1000 in first year and upto £2000 by third year. No gimicks or freebies, just a nice bank it appears, and they've got a concience - last year they turned away £10m of unethical funds! If you're a Co-Operative Member then you get a share of the banks profits!

[emmawillyarms]

Where can I find a comparison of student accounts for 09/10?
I love this website by the way, it's so useful. I'm starting uni at Lancaster in September, but I live in Manchester, so it's a bit of a gem for me

[Owen]

They've only just come out, so will be updating this thread very soon! Thanks for your comment

[jakal]

one thing i must add is that you have to ask for the overdraft to be put in place. When i joined Natwest i thought that the overdraft just came automatically with the account. This lead to some embarassment when i tried to use my card and it got denied. You have to go into the bank and tell them that you are a student and then tell them how much you want the overdraft to be!

[Owen]

The article has been updated for 2009/10.

Let us know what overdrafts you manage to get from which banks.

[Jack]

I've *just* applied for Natwest, mainly to subsidise my travel back home on the trains, but they have a decent overdraft too. I haven't gone in and sorted out he actual overdraft though... I'll let you know! x

[jonty]

I've applied for the Halifax student account because of the overdraft really. I'm a second year student though, but still only got £1750 to start with. Could be worse! Might try the Natwest one as well to get the railcard. Can you do that?!