Choosing a student bank account can be tough but we’re here to help. Whether you’re a full-time, part-time or international student, there’s a student bank account for you! We’ll also help answer queries such as how to open a student bank account and explain how a student overdraft works. So, read on for our student bank account comparison 2023.
What makes a good student bank account?
With so many student bank accounts to choose from, it can be hard to know which one is best for you. As a general rule of thumb, a good student account will offer you a large overdraft and ideally, some kind of incentive. We’ll go into all of this in more detail so read on! Here’s a comparison of the main student bank accounts in the UK in 2023 (you can save this table for easy access).
Student bank account comparison 2023
This student bank account comparison table shows the best student bank accounts in the UK in 2023. As you can see, the overdraft amount varies between banks (more on this further on) and some banks offer an incentive for students to join. Some of these can save a lot of money in the long run. For example, the Santander 4-year railcard would be very advantageous for students who are going to be going back and forth a lot between uni and home.
The best international student bank account comparison 2023
Opening a UK bank account is integral for international students. In fact, you will need a UK bank account to receive student loan payments, to be paid for a part-time job, and pay for accommodation and other bills such as phone contracts and gym memberships. Plus, if you continue to use your foreign bank account in the UK, you’re going to end up paying hefty exchange rate fees. To help you decide which bank account to choose, we’ve rounded up the best international student bank accounts here, ordered by costs to receive and send money abroad. However, it’s worth checking fees on their websites for the country you might want to send/receive money from.
How to open a student bank account
Once you have used our student bank account comparison and have chosen a bank, the easiest thing to do is to go down to your local bank branch to set up the account. You can apply for the account before you have even started your university degree. However, to be accepted for a student bank account, you’ll most likely need a UCAS confirmation letter with an unconditional offer. Likewise, if your offer’s conditional, you’ll need to have A-Level results that meet the conditions. The bank will give you a credit check and then you’re good to start using your student bank account.
How does a student overdraft work?
A student overdraft is something that you will want to make sure that you have, but you may be wondering what it is. And how does a student overdraft work?
Well, an overdraft is where the bank lets you spend more than you’ve got (at no extra cost), up to a set amount. Essentially the bank is lending you money! Unlike regular bank accounts, student account overdrafts are interest-free. Of course, you will have to pay this money back so it’s best to not become reliant on your overdraft. However, it’s good knowing it’s there for emergencies.
How much overdraft will I get?
As you can see in the student bank comparison table above, the overdraft amount is labelled ‘up to’. That doesn’t guarantee that you get the full amount.
In fact, it’s worth noting that many student bank accounts offer tiered overdraft amounts. These increase with each year of study which essentially means that the further into uni you get, the bigger the overdraft amount. The amount of overdraft you get also depends on your credit rating.
What are student bank account interest rates?
The main benefit of a student bank account is that there are no interest rates. However, once you finish studying, any money that you do owe will start to accumulate a high interest rate that you will have to pay back. Read the next section to find out more.
Likewise, as student bank accounts are interest-free, this isn’t great if you have a sum of money saved that you are hoping to gain interest on. In that case, it’s better to put your money into a regular or savings account instead.
What happens if I don’t pay my overdraft?
When it comes to paying back your overdraft, time is of the essence! The longer you owe the bank money after you finish studying, the higher the interest and the harder it will be to get out of debt.
Although your overdraft is interest-free while you study, it will need to be repaid once you finish. It’s important not to become dependent on your overdraft as it could be a slippery slope to getting into debt. In fact, once you graduate, interest rates will jump massively, meaning that you may accumulate a lot more debt than the cost of your degree.
So, now you know all about opening a student bank account! Overdrafts and interest rates can all sound a bit scary but try not to stress too much. If you are worried, it is best to go and discuss your options with the bank directly. If you are struggling with financial issues you can also speak to the Student Support Services team at your university.
