Best Student Bank Accounts 2011/12
Banks want YOU!
Banks are actively looking for students - more than any other group of the population.
Students are essentially investing in themselves to (hopefully) get a good 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 a student bank account 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 always benefit from the next best deal. It may seem like too much effort, but it can pay dividends. If you are a 2nd or 3rd year student then switching could be worth it as you will get the same terms as anyone else.
What you need to open a student bank account
Many prospective students have asked us what they need in order to open a bank account in 2011. You do not need to take much to the bank. One or two forms of I.D. such as a passport and drivers licence with proof of address is needed plus a conditional or unconditional offer letter from UCAS. The letter from UCAS is essential to opening a student bank account.
Beware of the student bank account “freebies”
Don’t be taken in by freebies. A student bank account with a free MP3 player worth £20 is nowhere near as good as getting an interest free overdraft.
The banks are doing it a lot less this year as they realise that students are not fooled anymore by a simple freebie. Many students who are opening accounts now have MP3 players etc. already.
Go for the largest student 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. You can see all the top student bank accounts and what overdrafts they offer below.
Beware that the 0% interest period is not forever! It only lasts a certain number of years after you graduate before it hikes up and you need to pay up, or get screwed. Just as important, don’t go over your student overdraft limit or you could suffer heavy bank charges.
Take a look at our best graduate accounts article which has a list of the top graduate bank accounts on offer so that you can get an idea of how much money you will have to pay back and how quickly.
Student overdraft “up to” or “guaranteed”?
It’s worth noting that the advertised student overdraft limit is the maximum you can get, and usually only in your third year at university.
It may take you a long time to build up your student bank account overdraft. Some banks such as Halifax also attempt to lure in student by offering an overdraft of “up to” £3,000. We received feedback of many students last year who claimed that they never received the full £3,000 at any point during university.
Use your student bank account to make money
If you are lucky enough to have the means to pay without borrowing, it can be worth getting a student overdraft. Take it out and pump up your savings account, earning interest on the borrowed money whilst you’re a student. It won’t earn you huge amounts of money but it is worth doing for a little extra to spend every month.
Check your credit rating!
With a student bank account the overdraft you are able to obtain largely depends on your ‘credit rating‘, which you can check here for free. When you first open your student bank account you are likely to get around half of the advertised overdraft.
With all that information in mind, here are the current top student bank accounts taking the overdraft interest free period into account as voted for by students and us here at Save The Student.
Top Student Bank Accounts 2011/2012
1. The Co-operative
The Co-op weren’t even on our list last year but thanks to their great overdraft limit and ethical values they have shot to our number one. Let us see why.
The overdraft is one of the most important things in a student bank account and the co-op student account offers a guaranteed 0% interest overdraft of £1,400 in the first year, £1,700 in year 2 and £2,000 in year 3. All you have to do to receive this guaranteed limit is to deposit £300 (which can be from your student loan) into the account straight away.
The Co-ops student bank account for 2011 is a great account but beware that they do not offer a graduate account. You can either switch to an alternative graduate account after university or the Co-op allow you one year after you graduate to pay off your 0% overdraft.
2. Halifax / HBOS
The Halifax student bank account has risen from 3rd to 2nd in our rankings this year, but it still offers the highest interest-free overdraft limit with the longest period. The student account offers an overdraft of up to £3,000.
However, in your first year you are unlikely to top £1,000. When you apply you automatically get a £500 overdraft, so you need to ask for more throughout the years that you are at university and it will be judged case by case. The actual amount you get will depends upon your credit rating (check yours for free). You have one year after graduating to repay before interest starts being added. Don’t forget!
Also, make sure you don’t go over your overdraft limit with this account. You will be charged 24.3% AER as well as a monthly fee of £28 which will make the situation a lot worse.
3. NatWest/RBS
The Natwest student bank account has fallen from grace this year and is down from the top spot to number 3 on our list. However, don’t let this put you off as they still have a good student account in 2011.
The Natwest student bank account offers an overdraft up to £1,500 over the three years and a possible £2,000 for 1 year after leaving university. It is a tiered structure in which you will get a 0% overdraft limit of £500 in the first term, £750 in the second and £1,000 in the third. After this you are guaranteed to get around £1,250 in the second year and £1,500 in the third year.
Can you still get the student railcard?
Unfortunately the Natwest or RBS bank accounts no longer offers the student railcard unless you have been a previous customer with Natwest from June 2011 and hold an adapt account! We have personally been in contact with Natwest and they assure us to keep a look out for any updates on the website. Also, you are not guaranteed a railcard and each persons eligibility is being judged on a case by case basis. You have to call their customer services to see if you are eligible for the Student Railcard.
To add to this you now have to deposit £750 every 6 months to get your 0% overdraft, which would be covered by your maintenance loan. However, there was mass controversy as the original plans were to have it once every 3 months and Natwest appear to have backtracked under student pressure.
It appears as if Natwest will loose a lot of student customers this year due to their poor customer service and understanding of the target market.
4. HSBC
The HSBC account is very similar to the Halifax student account this year. There is an overdraft of up to £3,000 in your third year but once again you must apply for it in a case by case basis. The only amount you are guaranteed is the £500 overdraft you receive when opening your account.
The best thing about the HSBC bank account is that it offers 2% interest for any money you have in the account up to £1,000 which is great.
5. Lloyds TSB
This account is the last of out top student accounts article. We have chosen Lloyds TSB as it is the best account for students looking at taking a 5 year course such as medicine. The maximum interest free overdraft is £2,000 in year 5. You are most likely to reach a figure of around £1,500 in year 3.
This account also offers a freebie which is rare for the top student accounts in 2011. With the account you can get a free NUS extra card for 3 years which is valued at £33 and has lots of great discounts. Alongside this you can get 40 free music downloads by signing up.
Banks are an important part of student finance. For a full list of the banks rankings this year and more information head over to the student bank comparison table at studentbankaccounts.co.uk. This table offers extra information on the 8 major student bank accounts offered to students and you can see which may suit you the most.
Remember the top student bank accounts change each year, so make sure you’re still getting the best deal as an existing student and check back here for the best student bank account advice for students. Even better, join the newsletter to keep in the loop and also see the best student discounts chosen by us!
Other factors to consider
- Does the student bank account 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 student account online?
- Have a look over the bank charges.
- Branch location. A local bank can prove be worthwhile but not essential, especially on that rare day when you want or need to make a cash or cheque deposit.
This post will be updated annually to keep up with the current best student bank accounts.
Last updated 1st December, 2011
Jayne
07. Apr, 2011
Student finances – good advice – thank you
Jadene
30. Apr, 2011
Brilliant!
Very clear and useful advice here
Rosina
02. May, 2011
This has been really helpful. I am finding searching for an account quite hard as a mature student but this has really helped. Cheers,
Zoe
06. Jul, 2011
Unfortunatly the rail card no longer applies with Natwest as you need to be with natwest and to have changed your account from an Adapt account to a Student Acc by 1st July 2011 to be legible. This is disappointing as it was big pro for me.
Jake Butler
06. Jul, 2011
Hi Zoe,
You are correct that the Student Railcard is no longer on offer after the 1st of July. This indeed is a shame.
However if you take a look at our young persons railcard discount then this might help in saving you money.
Milites
29. Jul, 2011
Why is Natwest not rated here? They at least give you free insurance on some of your stuff (no I don’t work for them, I just wanted to know why it might not be good)
Jake Butler
30. Jul, 2011
Hi Miles,
The banks have just released their student bank account information for the new year and here at Save The Student we are currently working on updating the article. Be sure to check back in a week and we will have more information for you.
It is comments like yours that help us see what bank accounts students want. Thank you!
Milites
02. Aug, 2011
No problem. When I said Natwest I meant Santander. Sorry.
Still confused about the Natwest Railcard though. I went into a branch today and they said that they still offer them to students opening accounts.
carol
03. Aug, 2011
i took my daughter today to Nat west said she needed to open a basic account as the student account was not available unless you are a previous customer. So opened a basic then he went to copy the id that he wanted, came back and said that the rail card is not available for my daughter as the account has to be opened before 01 June 11. so what a waste of time….
Eil
04. Aug, 2011
My son opened a nat west student account last year and is still waiting for the railcard as promised. Today he received a letter informing him that from Oct ’11 he needs to continue to use his student acct as a main current acct and deposit £750 every 3 mths and have 9 debit transactions every 3 mths!!!.if he stops using it as a main current acct they will remove the free overdraft! Obviously don’t want customers!!!
sophie
06. Aug, 2011
if you go with natwest, from october you must have 750 in your account every 3 months and if student finance is every 4 months, also if you do not do this then they will start charging for your overdraft.
think that this should be a warning for those wanting to go to natwest
Jake Butler
10. Aug, 2011
The top student accounts have now been updated on Save The Student so you can make an informed decision.
If you want to know anymore information or would like to see anything else in the top student bank accounts article then don’t hesitate to comment.
James
10. Aug, 2011
I went with Natwest last year for my student bank account but after receiving the letter off them about the 3 month thing I changesd to co-op.
They were honest and up front and I have had no problems with their student account yet.
aman
20. Aug, 2011
never had any problems with HSBC…Banked with them all my life and they are quietly brilliant. Decent overdrafts as well. My Pick
Helen
25. Aug, 2011
I went to Natwest in June and they were not offering the rail card as only offer it when the student campaign starts. The campaign starts mid august. They are offering it now. A rail card is not of any use to me.
So is the Co-op the best bank for the upcoming year?
Jake Butler
25. Aug, 2011
Co-op are definitely the best this year.
They are a good honest bank and guarantee the overdraft limit.
Mercedes
15. Sep, 2011
I went to Halifax 2 days ago to talk about opening a student account. I made an appointment which I have just arrived home from. Your site states you get a £500 overdraft automatically on opening the account, where did you find this information from as i cannot find it on their site? althought 2 days ago the staff member agreed, their ‘new system’ wouldnt allow it today, the member of staff said as far as she knows their products havent changed and she needs to research to change mine among others initial overdraft from £200 to £500. I was also told 2 days ago i had to input £100 to activate the account however today i was told that was before so that you can could change the amount from £500 to £1000 but then to leave it anyway and i can withdraw the £100 tomoro by takin in a slip in my passport. she also has to send me my papers for the opening in the post as she is ‘waiting for them to come’. i am already not impressed let alone if the overdraft is no long initially £500, i should know by tomorrow. RANT OVER
Jake Butler
15. Sep, 2011
I am sorry to hear that this is the case Mercedes. This information has been thoroughly researched by Save The Student and also supplied to us by the banks themselves.
The customer service you appear to have received from Halifax does not sound the best. We can suggest changing your account to somewhere else. I hope this article can help you to choose the alternative top student bank account.
Sade
25. Oct, 2011
hello,
wanted to know, where is barclays?? do they a goodoverdraft limit and if i may ask what are the services they provide for international students?
thanks.
Sade
25. Oct, 2011
i meant do they have offer good overdraft and also are international students eligible to apply for it??
Jake Butler
26. Oct, 2011
Hi Sade, Barclays offer a 0% overdraft up to £2,000 over the three years. However, international students need to apply for an international student account. If you want to check out the information for a Barclays student account then you can look here.
alexandra
18. Nov, 2011
just applied online for co op student account since comparison sites are saying it is the best
however they are saying that because i applied after my course had started that i needed a current account?
i dont have one but i ticked yes anyways. anyway the email said they will make their decision in 3-5 days
hopefully this account set up goes smoothly