Best student bank accounts 2021
Choosing the right student account can be a minefield... but not with our detailed comparison on what all the banks have to offer students in 2021/22!
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!
First, we'll take you through the important things to look out for when choosing a bank, then review and compare the best student accounts this year in a clear comparison table.
Compare student bank accounts
What is a student account?
A student account is designed exclusively for university students. They are based on the standard accounts offered by banks, however, students are also treated to benefits including freebies and interest-free overdrafts.
You will need to prove your student status when opening your account – something we'll come to later in the guide.
5 tips for choosing a top student bank account
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Beware of the student bank account "freebies"
There's plenty on offer this year, but don't be seduced by freebies! Offers including free products, travel discounts, cash rewards and other "exclusive" deals may sound tempting but you need to be smart.
A student bank account offering a freebie worth £20 is pitiful compared to a large interest-free overdraft for three years or more...
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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 student bank accounts 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 begin paying up before you start getting screwed by higher repayments.
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Is the overdraft 'up to' or 'guaranteed'?
The advertised student 0% interest overdraft is often the maximum they offer (hence the "up to" wording). For many banks, this amount is only available in your final year at university and only to students with a decent credit rating (see below).
Our comparison below of the best student accounts considers the likelihood of you receiving the full amount from each bank.
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Know the repayment conditions
Sure, you probably won't have to repay your overdraft until after you graduate, but the sudden demand for £3,000 could be quite a shock!
So, don't treat it as free money and instead plan ahead, which starts with understanding the conditions.
Once you leave uni, most student bank accounts automatically become a graduate bank account, which deals with repaying your overdraft over a certain period.
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Know your credit rating
Student account overdrafts are a form of borrowing, so you'll be credit scored when applying. The quality of your score can determine how much overdraft you'll be offered. You can raise your chances of approval by knowing your own credit score and taking steps to improve it.
Start by getting a free credit score from Experian, the largest agency used by banks.
What do you need to open a bank account?
Luckily, there's not too much! However, at the least UK students 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'll still have to send off supporting documents or take them in to your local branch. Documents must be original copies, not photocopies.
Once you've opened a new account, be sure to update your Student Finance body and let them know your new bank account details (don't worry, you can do it online).
Below are the best student bank accounts for this year, taking into account the interest-free overdraft terms and student satisfaction scores from our latest banking survey.
International student? Click here for our new guide on bank accounts that are open to non-UK students.
Student bank accounts 2021 |
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| Bank account | 0% Overdraft | Incentive | Student score | Review | ||
|---|---|---|---|---|---|---|
Santander 123 Student Account |
Up to £2,000 |
4yr railcard | 87.8% | |||
Nationwide FlexStudent |
Up to £3,000 |
None | 86.8% | |||
HSBC Student Bank Account |
Up to £3,000 |
None | 84.2% | |||
Barclays Student Additions |
Up to £3,000 |
12 month Perlego subscription | 87.2% | |||
NatWest Student Account |
Up to £2,000 |
Amazon Student, Coachcard or tastecard | 86.6% | |||
RBS Student Account |
Up to £2,000 |
Amazon Student, Coachcard or tastecard | 84.4% | |||
Halifax Student Current Account |
Up to £1,500 |
0.10% in-credit interest | 85.4% | |||
Lloyds Student Account |
Up to £2,000 |
None | 84.4% | |||
TSB Student Account |
Up to £1,500 |
5% in-credit interest up to £500 |
86.6% | |||
Co-operative Student Account |
Up to £2,000 |
None | N/A | |||
| EAR = Equivalent Annual Rate. Ranked by best value. Student scores from 2021 survey. Figures and terms subject to change. Please check bank websites for details. |
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Student bank account reviews
Santander 123 Student Account
0% overdraft
Up to £2,000.
- Year 1: £1,500
- Year 2: £1,500
- Year 3: £1,500
- Year 4: £1,800
- Year 5: £2,000.
Unlike other banks, most students do get the full £1,500 overdraft with Santander – but it’s still not guaranteed and depends on your credit rating.
To receive the overdraft you must deposit at least £500 per term into the account (i.e. your Maintenance Loan).
Upon opening the account you’ll be given a 0% overdraft of £250 which will increase up to £1,500 within your first year. If your course is longer then you can get up to £2,000 by your fifth year.
Sign-up incentive
The four-year 16–25 railcard is worth around £100 and saves you one-third off all train travel within the UK.
We have confirmation that current students are also eligible for the railcard! Simply switch to this account from your current bank.
Tip: Once you receive the free railcard (usually you receive a code within 60 days of opening your account) you could switch to another bank offering a larger overdraft 😉
Our review
Santander’s advertised overdraft is half that of other banks, so why is it our top pick this year?
It’s really important to remember that the overdraft amounts are “up to”. So, for example, we believe you’re more likely to get £1,500 out of Santander than HSBC (who advertise £3,000) over the course of your degree.
In this case, the freebie railcard is good value, saving you the cost of buying it and of course the ticket savings for your whole degree thereafter.
Oh, and Santander came top in our student survey this year…
Student Satisfaction Score: 4.39 out of 5
Nationwide FlexStudent Account
0% overdraft
Up to £3,000.
- Year 1: £1,000
- Year 2: £2,000
- Year 3: £3,000.
One of the best student bank account overdrafts advertised this year. Nationwide have informed us that if you are accepted for the account you will be able to get the full overdraft guaranteed.
You should receive up to £1,000 in year one and £3,000 in year three as long as you deposit £500 a term and keep a healthy account.
There is no sign-up incentive though, unfortunately.
Our review
After just a few years of offering a student account, Nationwide have quickly become a student favourite.
There’s no sign-up incentive but the overdraft on offer is one of the largest (and the only one that’s fully guaranteed).
Just be warned that you can only apply for the account five months or less before your course starts, or within two months of starting.
Student Satisfaction Score: 4.34 out of 5
HSBC Student Bank Account
0% overdraft
Up to £3,000.
- Year 1: £1,000
- Year 2: £2,000
- Year 3: £3,000.
All students can get £1,000 upon opening an account which can rise to £3,000 in your third year.
Our review
The HSBC account this year is not as attractive as in previous years as there’s no in-credit interest or freebie available for signing up.
However, the overdraft is potentially worth it.
Student Satisfaction Score: 4.21 out of 5
Barclays Student Additions Account
0% overdraft
Up to £3,000.
- Year 1: £1,000
- Year 2: £2,000
- Year 3: £3,000.
Upon opening your account you’ll get a £500 overdraft, and from then on you’ll have to ask to increase it.
In the second year, you then get up to £2,000 and £3,000 for the third.
Barclays advertise that students can get “up to” the amount each year but, as with most banks, it’s tricky as it’s based on your credit score.
Sign-up incentive
This year, Barclays is offering a 12-month subscription to Perlego, the online book library.
This freebie is worth £96 (based on an annual subscription on the Perlego site).
Our review
The overdraft is pretty meaty but not guaranteed, and the incentive, although not as good as others on the market, is better than nothing.
They were well-reviewed in our student banking survey but, essentially, there’s better out there!
Student Satisfaction Score: 4.36 out of 5
NatWest Student Current Account
0% overdraft
Up to £2,000.
NatWest’s 0% overdraft is reasonable at £2,000 and the chances of obtaining it (eventually) are quite high.
The first year is tiered at £500 in your first term then up to £2,000 in your second.
Sign-up incentive
This year NatWest have a choice of three sign-up incentives. You can choose between:
- One year of Amazon Student membership
- Four-year National Express Coachcard (1/3 off coach travel)
- Or a four-year tastecard (two-for-one or 50% off at hundreds of restaurants).
It’s best to choose the right one for you. However, separate from this bank account, students are already eligible for six months free Amazon Student and then a cost of around £24 for six months after that.
A Coachcard usually costs £12.50 a year (or £30 for three years) and a one-year tastecard is usually priced at around £35.
But, bear in that, rather than getting a tastecard, you can get two-for-one meals for much less using Meerkat meals. So, it may be worth choosing a different perk with your student bank account.
Our review
NatWest once topped our student account table, but in recent years has slipped down as other banks increase their 0% overdraft amounts.
Still, the freebies are ok and the tiered overdraft system can also be a benefit as it stops you from blowing your whole overdraft in the first term!
Student Satisfaction Score: 4.33 out of 5
RBS Student Account
0% overdraft
Up to £2,000.
Whilst RBS’s 0% overdraft has a low ceiling of £2,000 by your third year, the chances of obtaining it (eventually) are quite high.
The first year is tiered: £500 in your first term to £2,000 in your second.
Be aware that you must deposit £750 every six months (eg. your maintenance loan) and make at least three monthly transactions to get any overdraft at all.
Sign-up incentive
Identical to NatWest, there’s a choice of three sign-up incentives. You can choose between:
- One year of Amazon Student membership
- Four-year National Express Coachcard (1/3 off coach travel)
- Or a four-year tastecard (two-for-one or 50% off at hundreds of restaurants).
It’s worth noting that students are already eligible for six months of free Amazon Student and then a cost of around £24 for six months after that.
Meanwhile, the Coachcard is worth £12.50 a year (or £30 for three years), and a one-year tastecard costs about £35.
You can get two-for-one meals for much less using Meerkat meals too.
Our review
RBS used to be more competitive but have recently slipped down the table due to lower overdraft amounts.
The freebie choices are pretty good and the tiered overdraft system can also be a benefit, as it should mean you can’t blow your whole overdraft in the first term!
Student Satisfaction Score: 4.22 out of 5
Halifax Student Current Account
0% overdraft
Up to £1,500.
Although Halifax advertises an overdraft of “up to” £1,500 at 0% from your first year at uni, you’re very unlikely to get the total amount.
To increase your overdraft amount you’ll need to keep hounding the bank throughout your time at uni, and they’ll judge applications on a case-by-case basis.
Aside from your abilities to persuade them, the amount you get will depend upon your credit history (check yours for free) and spending habits.
Our review
According to reports from students who’ve banked with Halifax, getting your mitts on the maximum £1,500 0% overdraft is harder than resisting the temptation of spending your whole Student Loan in a week.
Halifax’s student bank account also lacks any form of notable freebie. Although this is disappointing, it does offer cashback with certain stores.
Student Satisfaction Score: 4.27 out of 5
Lloyds Student Current Account
0% overdraft
Up to £2,000.
In the first year, the 0% overdraft limit is tiered: £500 for the first six months; £1,000 in months seven to nine; and £1,500 beyond that.
With a maximum of £1,500 (or £2,000 if you study for four to six years), Lloyds aren’t the most generous – however, most students will get the full amount after the first year.
Sign-up incentive
In the past, Lloyds has offered a free TOTUM card with its student account. However, this year, there’s no indication that it’ll be offered again.
Keep an eye on this page to see if it does come back.
Our review
In recent years Lloyds had a public break-up with TSB, so there’s a new student account for both.
If you have a poor credit score (check for free), Lloyds are a good choice since a high proportion of applicants receive the full overdraft. The tiered overdraft system can also help with budgeting your money over the year.
Student Satisfaction Score: 4.22 out of 5
TSB Student Account
0% overdraft
Up to £1,500.
The TSB 0% overdraft is tiered in the first year: £500 for the first six months; £1,000 in months seven to nine; and up to £1,500 thereafter.
You’ll need to apply and badger them to bump up your limit but, depending on your credit score, you have a relatively good chance of receiving the full advertised amount by the second year.
Our review
Aside from earning 5% interest on balances up to £500 (£25 a year), there’s not too much going for this student account.
Student Satisfaction Score: 4.33 out of 5
The Co-operative Student Account
0% overdraft
Up to £2,000.
- Year 1: £1,400
- Year 2: £1,700
- Year 3: £2,000
To be eligible for the full amount you must deposit £300 within 28 days of opening the account, and that amount must stay in there for at least 48 hours afterwards (in other words, you can’t just transfer the money in and out straight away). As with all accounts, you’ll also need to pass a credit history check.
You also have to ask the bank for the increase each year.
Our review
Despite a distinct lack of freebies, the great news here is that, in the past, a high number of students have reported getting the full advertised overdraft amounts with Co-op. Just make sure to spend it responsibly.
Co-op is also a popular choice among students as the bank has a reputation for decent customer service.
Student Satisfaction Score: N/A (Co-op’s account wasn’t open to new customers for a couple of years, so we excluded it from our survey)
International students
If you are a student coming to the UK to study, unfortunately you won’t be eligible for an overdraft and most of the added benefits that come with the student accounts reviewed above.
Assuming you are living in the UK for more than six months, you can apply for a basic current account with most UK banks. Otherwise, you may be better off with a prepaid card.
We’ve reviewed the UK international student bank accounts in our new guide. Most of these accounts don’t charge a subscription fee and allow you to make cash withdrawals and card payments.
When applying you will need:
- Current passport
- Valid visa
- Student ID or acceptance letter
- Home bank statement
- Proof of address in the UK.
Postgraduate bank accounts
It used to be that banks had specific accounts for postgraduate students, but now, in most cases, postgraduates can either apply for (or switch to) a normal student bank account or extend a student account already held.
To be eligible you will need to be on a recognised master’s or doctorate (PhD) course at a British university. You should also be aware that some student accounts are only available to full-time students, so if you’re on a part-time postgraduate course, you may have to make do with a normal current account.
Essentially, the message is speak to your current bank first to see what they’re willing to offer. If that doesn’t prove fruitful, work through the banks above to see if you can switch on to another student account.
If you don’t take any action, your student account is likely to morph into a graduate bank account.
Why do banks love students?
Banks are actively targeting students with big incentives for good reason.
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 you to reap the rewards so they’re ‘banking’ on you to become a valuable long-term customer.
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 to benefit from the next best deal. It may seem like too much effort, but switching can pay dividends for many students and graduates.
Video guide
Recorded a while ago so please excuse the quality, but the info is still relevant!
See what students had to say about their banks in our latest student banking survey.
Comments
Angiemd
Hi, my son is starting uni in London in September. Could he open a Santander account for the free railcard and close it as soon as he receives the railcard in order to open a Nationwide account, this would give him overall more overdraft than Santander?
Jake Butler
Hi, there is a possibility that he should be able to do this. The only issue would be if Nationwide don't allow him to open an account but I cannot see why not.
Robbie Maggi
I'll start my first year of university as a EU student. I was checking which one of the bank account are the best for students like me, but unfortunately I found out that the banks DO NOT have advantages for us. For instance, they DO NOT OFFER a cheque book, overdraft or credit facilities. Does anyone know which bank is the best for EU student? Thank you for your help!
bethanie
Could I set up two student accounts, i.e one with Santander to receive the 4 yr rail card and to use as my main student bank account as id need to put in at least £500 each term to keep it activated, but also set up and HSBC student account to receive the Amazon incentive and there isn't a set amount that needs to be paid in in order to keep it active and therefore just use it every now and then but mainly set it up for the incentive? thank you
Jake Butler
Hi Bethanie, it's against most of the banks' T&Cs to hold more than one student bank account at a time.
jay
what is the best bank for a postgraduate overdraft?
MJ
Just to make you aware, Co-Operative Bank are longer offering Student Bank Accounts. Anyone who has an existing Student Bank Account with them won't be affected, however they are no longer offering this product to new customers (or existing Co-Op bank customers like myself!).
Save the Student
Thanks Charlie - you are correct and this is noted within our review of the account, and it's end of the table. We've left it for now so current customers can compare with other student accounts when thinking about switching.
extermin8or2
Hey, I have a 123 student account with santander. The overdraft limit is at 2000 now. I've just transitioned to postgraduate course and start in a week so need to inform them and get a postgraduate account thing is will that overdraft limit change as the maximum postgraduate overdraft limit is 1500. If so what happens if im uhhh say -1600 at the moment? Do I need to go find the money to put me back over the 1500 mark? Does anyone know?
Anil
I am about to go into Year 3 at the end of this month. I was wondering if it is possible to transfer from one student bank to another? Or can you only change at the start of your course i.e. before you start Year 1?
Save the Student
With almost all the banks you can switch anytime (though still check the terms when applying), and we would encourage students to do this is possible to get the best deal each year.
Shirley
I'm about to start uni again to study for a History BA and want to open a student bank account with HSBC as the gift voucher and student prime freebie would be very beneficial to me. I'm a mature student (40) so this wouldn't be my main bank account. Also, I would NOT be getting a student loan or maintenance grant as I already have a nursing degree. Would I be able to open the account without an initial deposit and without any payments going in at all? The application form asks what the opening deposit will be, what the incomings will be and what the outgoings will be. If I put '0' in these boxes, will I be declined?
Save the Student
Can't find anything to say you can't open with £0, but probably worth putting some in so not to raise a flag.
Ann Lock
My granddaughter has just been declined a student account with Santander despite the fact that she has an HSBC savings account and a Barclays current account with debit card. She was offered an unconditional place by five universities and is starting at University of Kent in September. Apparently her credit rating was checked with Experian but she has never owed money nor had an overdraft. She was told she doesn´t meet their criteria! So why???
Save the Student
That's unusual Ann, we would suggest that she checks her personal credit report to see if there is anything unexpected showing up.
DG
Do you have any similar comparison for International student account offerings? For instance, Santander charges £5/month for an account, whereas Nationwide's account is free. It seems the rankings are likely to be rather different.
Ashis
What does In-Credit Interest mean? And do you need a current account in Santander to open a student account, also when do you pay £500.
Jake Butler
Hi Ashis, it means that if you are in credit (have money in your account) you can earn interest on it. You do not need a Santander current account to open a student account and you will need to pay the £500 in upon opening the account.
John T
Hi, I opened a Halifax student account a few and they didn't offer me an overdraft during the application process and even after opening (in online banking). My credit score is regarded as 'Fair' so I'm not sure what could be impacting the ability to get even a £100 overdraft. Any strong recommendations? Or would it be worth looking into switching account providers before September?
Jake Butler
Hi John, did you open the account with proof of your student status? You could talk to someone within the bank. However, if you are not successful it might be an idea to switch.
James Davidson
Hello, is it possible for me to one by one open and close student accounts so i could get the perks of each, for example: open up HSBC so im eligible for the gift card, then santander for the railcard, then rbs for the coachcard, and will this affect credit rating if im opening and closing accounts
Zoë Bicknell
The banks actually have taken steps to prevent this from occurring as I went in and spoke with Santander as I was setting up my account and I can't quite remember how they did it but the banks are very aware of people doing this and will not allow you to do it.
Jake Butler
Hey Zoe, thanks for the heads up. Which way round did you do it? Had you closed your first account before opening the next one?
Jake Butler
It shouldn't cause too many issues but will obviously go onto your credit record.
What you actually need to watch out for is the terms of each account and their freebies. For example, you may have to wait 30 days to get your freebie from one bank and by that time you may not be able to get one from any of the others.
Georgina Uttley
Hi! I'm starting university for postgraduate study in September- I have heard of the postgraduate 123 account with Santander but wondered if you guys have any information on any other banks who may offer such an account? Also, do you know if Postgraduates are eligible for student accounts? (My course is only 1 year long though) Thanks
Jake Butler
Hi Georgina, most of the time you should be able to talk to your current bank to see what they offer if you're transitioning from undergraduate to postgrad. As far as I'm aware Natwest and RBS will let you open an account as a postgrad too but it may be labelled as the student account (just in years 4 and 5). Hope that helps
Heidi Ko
Hi, are part-time postgraduate students eligible for student accounts? I did my undergraduate course several (graduated in 2008) so can't get a graduate account if I understand correctly. Thanks
Jake Butler
Hi Heidi, you would need to check with the banks themselves as each one will have a different set of requirements.
Fahima Begum
Thanks for this information! Very helpful! I will start uni in oct 2017 and i would like to take advantage of that santander student account then switch to HSBC, will i still receive the railcard? Also, when you sign up for a student account, will you have to transfer all your money in your current account and close it, or do you just open a new student bank account and put some money in it? And when i close my santander account, how do i then switch to HSBC? Thanks in advance!
Jake Butler
Hi Fahima, we don't have the details for next/this year's accounts yet but please keep an eye out on this page towards the end of summer for the full details.
Albie
Do you have any suggestions for what to do if I've been turned down for a Santander account? Can I try again in a few months/next year, or is it worth looking at other banks - I think it was my credit score that let me down (although I don't know why) so I don't know if more applications on my file would make things worse?
Jean
I am a european student and want to ask ou what kind of account you advise me, given that I did not live in the UK during 3 years. Moreover, it is an other question : I see nowhere prices to open a bank account : are there fees, or is it free ? (because in my country, we should pay 10£/month)... Thank you in advance !
Owen
I would still follow our table, and before applying ask their customer service regarding your residency.
All the bank accounts listed are free to open.
Brian Boru
Give the number of of foreign students, it might be useful to have specific comments on conditions for non-residents. Most banks say "3 years UK residence", but Santander and a few others suggest this is negotiable if you "pop in" (not tried this yet - next week will tell). RBS appears to allow you to open an account even if you're non-resident, but getting the overdraft requires residence.
Alison
My son went into our local HSBC bank this week to ask for a student account. Because he accidentally went overdrawn by £20 a (first time) he's been declined. He has been with HSBC several years. He's been told he can't reapply for 2 months!
Jake Butler
Best option in that case is to leave HSBC and go elsewhere. Don't be loyal to the banks.
Yasir
Do i have to deposit money into a HSBC account straight away.
Jake Butler
You shouldn't have to but it's worth checking with your bank.
Matthew
Do you still need to pay the £500 when you open up Santanders, or can you switch scott free by the start of this year?
Jake Butler
If you want to receive the freebie and the overdraft that you need to deposit the £500 into your account first. You must also sign up for online banking.
Paul
Any details on setting up a Santander student account from Ireland in time for when I start University?
Rosemary
Trying to do same thing for my daughter for Cardiff! As not UK resident for 3 years, she cannot open 123 account. Has to be International account with £5 monthly fee - Even though we work in NI and this account will be credited from our NI accounts. No overdraft either. Might call into branch in Derry which is 5 miles from us in Muff! and see if I can open one now. Don't want her with a pile of cash!
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