Best student bank accounts 2018
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 2018/19!
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
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, insurance, cashback rewards and other "exclusive" deals may sound tempting but you need to be smart.A student bank account offering free MP3 downloads worth £20 is pitiful compared to a large interest-free overdraft for 3 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 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.
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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 plan ahead, which starts with understanding the conditions.
Most banks automatically turn your student account into 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 will still have to send off supporting documents or take them into your local branch. Documents must be original copies, not photocopies.
Once you've opened a new account, be sure to update Student Finance of your new bank account details (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 to jump down to bank accounts that are open to non-UK students.
Student bank accounts 2018 |
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| Bank account | 0% Overdraft | Incentive | Student score | Review | ||
|---|---|---|---|---|---|---|
Santander 123 Student Account |
Up to £2,000 |
4yr railcard + up to 3% in-credit interest |
90% | |||
Nationwide FlexStudent |
Up to £3,000 |
1% in-credit interest up to £1k |
86.8% | |||
HSBC Student Bank Account |
Up to £3,000 |
£80 Amazon gift card + 1yr Student Prime | 79.2% | |||
Barclays Student Additions |
Up to £3,000 |
None | 82.2% | |||
NatWest Student Account |
Up to £2,000 |
4yr National Express coachcard | 84.8% | |||
RBS Student Account |
Up to £2,000 |
4yr National Express coachcard | 78.8% | |||
Halifax Student Current Account |
Up to £1,500 |
0.10% in-credit interest | 83.8% | |||
Lloyds Student Account |
Up to £1,500 |
NUS Extra card | 83.6% | |||
TSB Student Account |
Up to £1,510 |
5% in-credit interest up to £500 |
73.4% | |||
Co-operative Student Account |
Up to £2,000 |
Applications closed | 81.6% | |||
| EAR = Equivalent Annual Rate. Ranked by best value. Student scores from 2018 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 (eg. student 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 4 year 16-25 railcard is worth around £100 and saves you one-third off all train travel within the UK.
If you switch to this account from another as a current student you will also be eligible for the 4 year railcard.
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
2018 Student Satisfaction Winner!
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 average 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.
The in-credit interest is also a rare treat, giving you as much as a 3% return on money sitting in your bank (like a savings account). You get 1% on £100, 2% on £200 and 3% up to £2,000.
Oh, and Santander came top in our student survey this year…
Student Satisfaction Score: 4.5 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 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 £1k in year one and £3k in year three as long as you deposit £500 a term and keep a healthy account.
There is no sign up incentive, but you do earn 1% interest on balances up to £1,000.
Our review
This is the third year that Nationwide have put their hat in the student bank account ring, and it’s been a well received deal.
There’s no sign up incentive but the overdraft on offer is one of the largest (and the only one that’s fully guaranteed) and the in-credit interest will help a little for any students who are out of their overdraft.
Just be warned that you must apply for the account 2 months either side of your course start date.
Student Satisfaction Score: 4.34 out of 5
Halifax Student Current Account
0% overdraft
Up to £1,500.
Although Halifax advertise an ‘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 through university as well as top up £500 a quarter, and they’ll judge case-by-case.
Aside from your abilities to mither 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!
Whilst not being the worst place to bank, Halifax do have some nasty penalties for going over your arranged overdraft to beware of. If you get this account you should never go over your limit!
The account also lacks any form of notable freebie which is disappointing but does have cashback on certain stores.
Student Satisfaction Score: 4.19 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 are guaranteed £1,000 upon opening an account which rises to £3,000 in your third year.
Having said that, if you have a good credit score you might get closer to the full £3,000 sooner.
Sign up incentive
First year students will receive a free £80 Amazon voucher (before 31/12/2018).
You can also take advantage of one whole year of free Amazon Student Prime.
Once you have finished your first year of study you can no longer switch to this account for the benefits.
Our review
HSBC have got a good account this year. The guaranteed overdraft is a real plus.
The Amazon freebie as also attractive and if you’re savvy you can take advantage of the 6 months Amazon Student Prime trial and add the 12 months from HSBC after. You just need to make sure to cancel the 6 months auto payment Amazon will have set up to take advantage of the trial.
Finally, there’s no in credit interest with the account but HSBC do offer a linked 3% regular saver account.
Check out our Santander review above for a clever trick combining the two accounts to really squeeze out the value from the banks.
Student Satisfaction Score: 3.96 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 1st term to £2,000 in your 2nd.
Be aware that you must deposit £750 every 6 months (eg. your maintenance loan) and make at least 3 monthly transactions to get any overdraft at all.
Sign up incentive
This year RBS have a choice of 3 sign up incentives. You can choose between:
- 1 year of Amazon Student membership and a £10 Amazon.co.uk Gift Card
- 1 year National Express Coachcard (1/3 off coach travel)
- Or a 1 year Tastecard (2 for 1 at 100s of restaurants)
It’s worth noting that not only can you get a better Amazon offer from HSBC but students are already eligible for 6 months free Amazon Student and then a cost of around £20 for 6 months after that meaning that freebie is worth around £30. The coachcard is worth £40 and a 1 year Tastecard is £30.
You can get 2 for 1 meals for much less using Meerkat meals too.
Our review
RBS used to be more competitive however 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 in that you can’t blow your whole overdraft in the first term!
Student Satisfaction Score: 3.94 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 1st term then up to £2,000 in your 2nd.
Be aware that you must deposit £750 every 6 months (eg. your maintenance loan) and make at least 3 monthly transactions to get any overdraft at all.
Sign up incentive
Identical to RBS, there’s a choice 3 sign up incentives. You can choose between:
- 1 year of Amazon Student membership and a £10 Amazon.co.uk Gift Card
- 1 year National Express Coachcard (1/3 off coach travel)
- Or a 1 year Tastecard (2 for 1 at 100s of restaurants)
It’s best to choose the right one for you. However, you get a better Amazon offer from HSBC and students are already eligible for 6 months free Amazon Student and then a cost of around £20 for 6 months after that meaning that freebie is worth around £30.
The coachcard is worth £40 and a 1 year Tastecard is usually priced at less than £30.
Rather than a Tastecard you can get 2 for 1 meals for much less using Meerkat meals too.
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 in that you can’t blow your whole overdraft in the first term!
Student Satisfaction Score: 4.24 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.
Our review
The overdraft is pretty meaty but not guaranteed, and there aren’t any other incentives.
Essentially, there’s better out there!
Student Satisfaction Score: 4.11 out of 5
Lloyds Student Current Account
0% overdraft
Up to £1,500.
In the first year, the 0% overdraft limit is tiered: £500 for the first 6 months; £1,000 in months 7 to 9; and £1,500 beyond that.
With a max. of £1,500 (or £2,000 if you study for 4-6 years), Lloyds aren’t the most generous however most students will get the full amount after the first year.
Sign up incentive
The NUS Extra card is worth just £32, but it’s valid for 3 years. It’s no longer a student essential but it does offer a couple of decent exclusive student discounts.
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 tiering can also help with budgeting your money over the year.
The freebie is a draw too.
Student Satisfaction Score: 4.18 out of 5
TSB Student Account
0% overdraft
Up to £1,510.
The TSB 0% overdraft is tiered in the first year: £510 for the first six months; £1,010 in months 7 to 9; and up to £1,510 thereafter.
You’ll need to apply and badger them to bump up your limit but, depending on your credit score, chances are good 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.
TSB also came bottom in our student poll for customer service, likely due to the serious online banking issues they’ve had in the past year.
You might think that the extra £10 on top of their overdraft amounts is a typo, but it’s really a ploy to make them appear more attractive than other banks 😉
Student Satisfaction Score: 3.67 out of 5
The Co-operative Student Account
Co-op currently have no account for 2018. The information here is for current customers only at the moment.
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 straight away and then continue to deposit your main source of income (eg. maintenance loan or wages) into the account each term. 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 a high number of students have reported getting the full advertised overdraft amounts with Co-op (around 90%). Just make sure to spend it responsibly.
Co-op are also popular among students due to their decent customer service.
Student Satisfaction Score: 4.08 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 accounts reviewed above.
Assuming you are living in the UK for more than six months, you can apply for a standard current account with most UK banks. Otherwise you may be better off with a prepaid card.
We’ve listed the banks we know accept international students below. All 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 (non-EU)
- Student ID or acceptance letter
- Home bank statement
- Proof of address in the UK
- To visit the bank in-branch
Bank accounts for international students
- NatWest Student Account
- HSBC Basic Account
- Barclays Student Additions
- Santander Basic Account
- Lloyds Classic Account
- TSB Classic Account
- Al Rayan Current Account (Sharia compliant)
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 Masters or doctorate (PhD) course at a British university. 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 2018 student banking survey.
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