Best Student Bank Accounts 2012/13
Looking to open a student account but not sure which bank to go with or how to apply? Well you’re in the right place!
This popular guide has everything you need to know on one page, plus our very informative video.
We’ll first go over some of the important points in choosing a bank before ranking the best student bank accounts for this year.
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Banks want YOU!
Banks are actively targeting students, more than any other group of the population.
There’s good reason, too. Students are essentially investing in themselves to (hopefully) get a higher than average 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 and they hope that you stash your earnings away with them.
Banks are looking to establish loyalty, and have good odds at keeping you for life once you’ve opened a student bank account with them.
Just remember that you don’t have to be loyal, and you should switch banks if necessary to benefit from the next best deal. It may seem like too much effort, but switching can pay dividends for many students and graduates.
What do I need to open a student bank account?
There’s not too much you need to open a student bank account. At the least you will be required to show:
- One or two forms of photo ID: such as a passport or driver’s licence
- Proof of address: such as a recent utility bill or bank statement
- Proof of student status: a letter of acceptance from your university, or UCAS offer letter.
Most banks now allow you to apply online for a student bank account, but you will still have to send off supporting documents or take them into your local branch. Documents must be original copies, not photocopies.
5 big tips for choosing a student bank account
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Beware of the student bank account “freebies”
Don’t be taken in by freebies! Short-term offers including free products, insurance, cashback rewards and other useful things may sound very appealing but you need to be smart.A student bank account offering a free MP3 player worth £20 is nowhere near as good as getting a large interest-free overdraft for 3 years or more. More on this below.
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Go for the largest student overdraft
An arranged overdraft is a common way of borrowing money through your current account. The best thing about a student account is that money borrowed through an overdraft has 0% interest. With an interest-free overdraft you pay back nothing more than what you borrow. This is unique to student bank accounts, so take full advantage of it!Even if you don’t feel like you need the full overdraft, still apply for it then take some of it out (interest-free) to pump up your savings account. Now you’re playing the system! You actually make money by earning interest on the borrowed money whilst you’re a student. We’re not talking mega-bucks, but for something so easy to do, it’s not a bad return!
Beware that the 0% interest period is not forever! It only lasts a certain number of years after you graduate before interest charges set in. You’ll need to starting paying up before you start getting screwed by higher repayments. Just as importantly, don’t ever go over your arranged student overdraft limit or you could suffer hefty bank charges.
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Is the overdraft “up to” or “guaranteed”?
It’s worth noting that the advertised student overdraft limit is often the maximum you can get. This amount is usually only available in your final year at university and only to students with a decent credit rating (you can now get a free report with Credit Reports Matter).For example, some high street banks such as Halifax attract students by offering an overdraft of “up to” £3,000. However we know that many students have claimed never to have received the full £3,000 at any point during university.
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Know the repayment conditions
In a recent survey we conducted, 65% of students asked said they didn’t really know when they have to repay their student overdraft. Sure, you probably won’t have to repay it until after you graduate, but by then it can be too late and the sudden demand for £3,000 can be quite a shock!After university, most banks automatically turn your student account into a graduate bank account which deals with repaying your overdraft over a certain period. Take a look at our graduate bank account guide which lists the top accounts on offer to graduates and gives you an idea of how much money you are likely to have to pay back and how quickly.
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Know your credit rating
Finally, if you can find the time, it’s worth knowing what the banks already think of you (from a risk point of view). The amount of overdraft they will award you depends on your credit score (spending history, past borrowing, income stream etc).Luckily you can get a free credit report for yourself online through Credit Reports Matter. We’ve used this service ourselves and it’s the best we’ve come across, though you will need to cancel your free trial once you’ve received your report. You can do this easily by calling the freephone number 0800 561 0083.
Hopefully things are a bit clearer for you now. With this information in mind, below are the best student bank accounts for 2012, taking the overdraft interest-free terms into account.
Top Student Bank Accounts 2012/2013
£2,000 guaranteed overdraft
1. The Co-operative
For the second year running, The Co-op are ranked as the best student account for 2012. Why? Simply because they offer you the best guaranteed overdraft.
Overdraft
As we know, the overdraft amount is the #1 thing to consider when comparing student bank accounts. 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 when you open with at least £300 (your student loan).
Some students can potentially get more with the Halifax account (see below) but you’ll need a very good credit score. In any case, it’s worth getting a free credit report (with Credit Reports Matter) to see whether you’d be likely to get the full overdraft with Halifax.
Extra info
The Co-op are well known for their student account customer service and ethical banking stance, so if you want to bank with a company that you know will look after you (and your money) then they could be your best bet.
If you go over your overdraft limit then you will be charged 18.9% EAR and 9.9% if you arrange it with the bank beforehand. More details here.
Watch out for…
Be aware that the Co-op do not offer a graduate account as such. 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 in full.
£3,000 ‘up-to’ overdraft
2. Halifax / HBOS
Halifax offer a great account for students looking to get their hands on the largest 0% overdraft. This student account offers an overdraft of up to a massive £3,000.
Overdraft
Keep in mind that in your first year you are unlikely to top the £1,000 limit. 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 depends upon your credit rating (check yours for free) and some students have reported in the past that getting the full overdraft is hard.
Extra info
The Halifax student account pays you 0.1% AER interest on all positive balances, which isn’t much but every little helps doesn’t it?
Watch out for…
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.
You have one year after graduating to repay the whole overdraft amount before interest starts being added. So don’t forget!
£50 for switching
3. Santander
Santander have been working hard this year to draw students in, and so have upped their offering to make it into our top 3.
Overdraft
You will be offered a guaranteed overdraft of £1,500 in the first, second and third year. On top of this, it is one of the only accounts to offer a noticeable amount of interest on positive balances (1% on the first £500).
Extra info
If you want to get your mitts on the free £50 for switching your account to Santander, make sure you apply by 30th November 2012.
Watch out for…
Going overdrawn will see you being charged £5 a day, so be careful with your budgeting!
The Santander student account was voted by students in 2011 as having poor customer service.
Free Railcard (existing customers)
4. NatWest / RBS
The Natwest and RBS accounts are extremely similar in offering a guaranteed £1,500 overdraft by year 3 as well as a free railcard, but now only to existing customers.
Overdraft
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.
To get the full overdraft you must deposit £750 every 6 months (your student loan).
Can you still get the Natwest student railcard?
Unfortunately, as of 2012, the NatWest and RBS bank accounts no longer offer the free 16-25 railcard to new customers. If you are a current customer you must have had an account with them from before 15th April 2012.
NatWest customers get a 4 year 16-25 railcard and RBS customers get a 3 year railcard plus 4 week bus pass (check their websites for more details).
Watch out for…
If you go over your overdraft limit then you will have to pay a pricey £6 daily fee.
New customers can no longer get the 16-25 railcard with this student bank account, hence its 4th position this year.
£3,000 ‘up-to’ overdraft
5. HSBC
The HSBC account is actually very similar to the Halifax student account this year, and just making it onto our top 5 list for 2012/13.
Overdraft
There is an overdraft of up to £3,000 in your third year but once again you must apply for it on a case by case basis. The only amount you are guaranteed is the £500 overdraft you receive when opening your account.
Extra info
A key benefit of the HSBC student account is that it pays 2% in interest for any money you have in the account up to £1,000 in your first year.
Watch out for…
It is very hard to get the maximum overdraft of £3,000 (again, check your credit score) and only £500 is guaranteed. You will have to contact HSBC in order to increase your overdraft.
Student bank account comparison table
Take a look below at all of the accounts on offer along with the key facts and figures.
| Banks | Maximum Overdraft | Max OD Guaranteed? | Freebies? | More Information |
|---|---|---|---|---|
| Halifax | £3000 |  | No | |
| Royal Bank of Scotland | £1500 |  | Free Travel Package (current customers) | |
| Natwest | £1500 | | Free Railcard (current customers) | |
| Lloyds TSB | £1500 | | Free NUS Extra Card | |
| Co-Operative Bank | £2000 | | No | |
| Santander | £1500 | | £50 Bonus | |
| Barclays | £2000 | | No | |
| HSBC | £3000 | | No | |
| Smile | £1800 | | No |
Student Bank Account Video
Watch our very own video on how to choose a student bank account.
Banks are a key component of student finance. For an even greater list of the student bank account rankings for this year head over to our sister site studentbankaccounts.co.uk. On there you’ll find a table offering more detailed information on the 8 best student bank accounts.
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 banking advice for students. To make things easier, join the newsletter to keep in the loop and also be informed of the best student deals handpicked by us every week!
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.
- If you want help with managing your money, then look at bank account alternatives such as the account with thinkmoney. This is a budgeting account and manages all of your outgoings on your behalf, and predicts any potential problems with your finances within 3 months. There is no overdraft so you won’t be tempted to overspend and therefore face any bank charges. There is a monthly fee of £14.50 for the account.
This post will be updated annually to keep up with the current best student bank accounts. We always do our best to make sure that the research is up-to-date and correct but Terms and Conditions may change.
Last updated 14th May, 2013What are other people reading?
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28 Responses to “Best Student Bank Accounts 2012/13”
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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
John
30. Jun, 2012
Just applied for the student account from Santander as it offers £50 if you apply at University branches only. Not a bad start to the term in september 2012.
Zen
09. Jul, 2012
What if your course runs for more than three years? Do banks take that into account for your free overdraft?
Owen Burek
09. Jul, 2012
Zen – good question, and the answer is that most banks offering student accounts extend the interest free overdraft for the duration of your course (and often for a year after graduating). You’ll still only be able to get the maximum offered on a 3yr course though, but then again it’s worth remembering that you will have to pay it all back in full (so it’s not free!).
Nick
16. Aug, 2012
My son is a UK citizen but not resident in the UK until he starts his course in September 2012. Coop says that you are eligible for their student account if you are a UK citizen or have 3 year’s residence but the application form seems requires 3 year residence. Why? Given his circumstances which accounts would best suit him?
Jake Butler
16. Aug, 2012
Hi Nick,
I would say that it is best to head into the Co-op and talk to a personal advisor. If your son is indeed a a UK resident then that is what Co-op say you need to be to open an account.
In terms of alternatives, Halifax and Santander do not require you to have lived as a UK resident for 3 years but simply be a UK resident who has proof of university acceptance.
I hope this helps.
I hope that this helps.
Holly Hammond
06. Jan, 2013
I had a current account with Santander and decided to switch to the student account partly because of the £50 bonus. But no, apparently that only applies to customers from other banks. This was pretty annoying as I asked the manager as I was switching if I would get this bonus and she said I would, when it wasn’t coming through I asked in another branch and they told me it was only for people switching entire banks not having accounts upgraded. I feel like they should have made this clearer or at least told their staff the right information