Budgeting & Banking

Best student bank accounts 2017

Choosing the right student account can be a bit of a minefield… but not with our detailed comparison on what all the banks have to offer students in 2017/18!
student bank accountsLooking to open a student account but not sure which bank to go with or how to apply? Well you're in the right place!

We'll take you through all the important things to look out for when choosing a bank, plus review and compare the best student accounts this year in a clear table.

7 tips for choosing a student bank account

  1. Banks want YOU!

    Compare student accountsBanks 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.

  2. Beware of the student bank account "freebies"

    Beware of bank freebiesThere's a whole lot on offer this year but don't be fully 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 free MP3 downloads worth £20 is nowhere near as good as getting a large interest-free overdraft for 3 years or more.

  3. 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!

    Largest student overdraftEven 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.

  4. Is the overdraft "up to" or "guaranteed"?

    Explaining account overdraftsIt'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 (see below).

    For example, some high street banks 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.

  5. Know the repayment conditions

    Student account repaymentIn 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.

  6. Know your credit rating

    Check your credit ratingFinally, 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). There's more info on that here.

    Luckily you now can get access your credit score for free with CreditMatcher. We've used this service ourselves and it's the best we've come across.

  7. Location, location, location…

    A local bank can prove to be worthwhile, especially when you need to make a cash or cheque deposit, or hand over any documentation.

    Having said that, don't make this your primary concern. You can withdraw money for free from other ATMs and with the increase in internet banking there are less reasons to head to your local branch these days.

See what students said about their bank in our Student Banking Survey

What do you need to open an account?

Luckily, there's not too much! However 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.

Hopefully things are a bit clearer for you now. With this information in mind, below are the best student bank accounts for this year, taking the overdraft interest-free terms into account.

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2017 student bank accounts ranked by best value

RankBank Account0% OverdraftIncentiveUnarranged Overdraft FeeIn-credit InterestReview
1. Santander
123 Student Account
Up to
£1,500 Breakdown
Year 1: £1,500
Year 2: £1,500
Year 3: £1,500
Year 4: £1,800
Year 5: £2,000
4yr 16-25 railcard See fees
£5 daily charge (max. £10 a month) + for each item either £5 if payment was approved or £10 if it bounced.
1% £100+
2% £200+
3% up to £2k
More
2. HSBC
Student Bank Account
Up to
£3,000 Breakdown
Year 1: £3,000
Year 2: £3,000
Year 3: £3,000
£60 Amazon voucher + 1 year Prime None 2% up to £1k
(Year one only)
More
3. Nationwide
FlexStudent Account
Up to
£3,000 Breakdown
Year 1: £1,000
Year 2: £2,000
Year 3: £3,000
None None 1% up to £1k More
4. Coop
Student Account
Up to
£2,000 Breakdown
Year 1: £1,400
Year 2: £1,700
Year 3: £2,000
None See fees
18.9% EAR1 + £15 for each item that bounced.
None More
5. Halifax
Student Current Account
Up to
£3,000 Breakdown
Year 1: £3,000
Year 2: £3,000
Year 3: £3,000
None See fees
24.2% EAR1 + £28 a month + £10 for unpaid (bounced) items.
0.10% More
6. RBS
Student Account
Up to
£2,000 Breakdown
Year 1: £2,000
Year 2: £2,000
Year 3: £2,000
4yr National Express coachcard See fees
£6 for each bounced item (max. £60 in any period).
None More
7. NatWest
Student Current Account
Up to
£2,000 Breakdown
Year 1: £2,000
Year 2: £2,000
Year 3: £2,000
4yr National Express coachcard See fees
£6 for each bounced item (max. £60 in any period).
None More
8. Barclays
Student Additions Account
Up to
£3,000 Breakdown
Year 1: £1,500
Year 2: £3,000
Year 3: £3,000
None See fees
£8 a day for any bounced items (max 1/day).
None More
9. Lloyds
Student Current Account
Up to
£1,500 Breakdown
Year 1: £1,500
Year 2: £1,500
Year 3: £1,500
NUS Extra card See fees
8.21% EAR1 + £6 a month + £10 for bounced items + variable daily charges.
None More
10. TSB
Student Account
Up to
£1,500 Breakdown
Year 1: £1,500
Year 2: £1,500
Year 3: £1,500
None See fees
8.21% EAR1 + £6 a month + £10 for bounced items + variable daily charges.
None More


Existing students, make sure you're still getting the best deal by switching! The top student bank accounts change each year (along with this page). Join our free newsletter to keep in the loop and also be informed of the best student deals handpicked by us every week!


(Recorded a while ago so please excuse the quality, the info still relevant!)

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