Best student bank accounts 2021
Choosing the right student bank account can be tricky... but not with our detailed comparison on what all the banks have to offer students in 2021/22!
Looking to open a student bank 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 bank 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 student 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 student 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 | |||
|---|---|---|---|---|---|---|
HSBC Student Bank Account |
Up to £3,000 |
£80 cash + £20 Uber Eats or ASOS Premier | 84.2% |
Full review |
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Santander 123 Student Account |
Up to £2,000 |
4yr Railcard | 87.8% |
Full review |
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NatWest Student Account |
Up to £2,000 |
£50 cash + 4 year Tastecard | 86.6% |
Full review |
||
RBS Student Account |
Up to £2,000 |
£50 cash + 4 year Tastecard | 84.4% |
Full review |
||
Barclays Student Additions |
Up to £1,500 |
12 month Perlego subscription | 87.2% |
Full review |
||
Halifax Student Current Account |
Up to £1,500 |
0.10% in-credit interest | 85.4% |
Full review |
||
Lloyds Student Account |
Up to £2,000 |
None | 84.4% |
Full review |
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TSB Student Account |
Up to £1,500 |
5% in-credit interest up to £500 |
86.6% |
Full review |
||
Co-operative Student Account |
Up to £2,000 |
None | N/A |
Full review |
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Nationwide FlexStudent |
Up to £3,000 |
None | 86.8% |
Full review |
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| 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
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 making it one of the largest student account overdrafts on offer.
Sign-up incentive
This account comes with an £80 cash incentive as well as a choice between a £20 Uber Eats voucher or ASOS Premier Delivery for a year.
It depends on your preference but it’s worth noting that ASOS Premier Delivery is worth £9.95 so the Uber Eats vouchers beats it for value.
It’s worth noting that there are a few terms with the offer. It’s only available to first years who open the HSBC Student Bank Account by 31 Dec 2021 and make 5 debit card transactions within the first month of opening.
You must be over 18, a resident of the UK, Channel Island, or Isle of Man resident for 3 years+ and currently living in the UK.
HSBC have also told us that ASOS Premier Delivery or Uber Eats vouchers may also not be available in some locations. Check their website via the link above for full T&Cs.
Our review
HSBC have a top student bank account option this year. Not only does it come with a large interest-free overdraft but it also boasts the highest value sign up incentives for this year.
The £80 cash will be a no brainer for most students.
Student Satisfaction Score: 4.21 out of 5
Santander 123 Student Bank 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
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 two sign up incentives on offer. Not only can you get £50 cash but also a four year Tastecard (worth around £140).
To be eligible you just need to register for online or mobile banking and opt to receive paperless statements within 30 days of opening the 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 this year are some of the best and the tiered overdraft system can also be a benefit as it stops you from blowing your whole overdraft in the first term!
Bear in mind that, rather than getting a Tastecard, you can get two-for-one meals for much less using Meerkat meals. So, take that freebie’s value with a pinch of salt.
Student Satisfaction Score: 4.33 out of 5
RBS Student Bank 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, you get two sign up incentives with this account which are £50 cash and a four year Tastecard.
A four year Tastecard usually costs about £140 but don’t let that sway you as 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
Barclays Student Additions Account
0% overdraft
Up to £1,500.
- Year 1: £1,000
- Year 2: £1,500
- Year 3: £1,500.
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 £1,500 and this stays the same 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 not as good as many other options and is 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
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 Bank 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 Bank 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)
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
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 bank 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.
See what students had to say about their banks in our latest student banking survey.
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