In this guide
The right student bank account can come with great perks to boost your finances. From travel perks to interest-free overdraft, we list the options to consider.
Last year, cash incentives were a mainstay of student bank accounts. According to Defaqto, a data company, the number of student bank accounts offering a £100 cash incentive upon opening increased from two in 2022 to seven in 2023.
“Providers are really competing for new student accounts this year because they see them as the next generation to hold their finances with them,” said Katie Brain at the time, consumer banking expert at Defaqto.
What type of incentives banks will turn to this year remains to be seen. This is largely because providers are still releasing their perks. In this article, we explain:
- What is a student bank account?
- The top student bank accounts
- The best student switching offers
- Student overdraft explained
Read more: Six best current accounts
What is a student bank account?
As explained in a separate article, a bank account is where you can manage all your finances in one place. This can be from sorting incoming funds, like a stipend from your parents, to making purchases, like textbooks and drinks on a night out.
Bank accounts slightly differ, however, from current accounts because they’re offered by Financial Conduct Authority (FCA) regulated banks. Although these two accounts largely perform the same function, money in your bank account is protected by the FSCS.
More on this scheme can be found here.
A student bank account is a place where people studying at university can manage their money and take advantage of additional perks. This may include discounted travel and 0% overdraft rates.
LATEST OFFER: Win your tuition back with Santander
The top student bank accounts
There are many factors to consider when choosing the right student current account for you.
One bank may be offering some great discounts on certain restaurants for example, but that’s no good if you never go to those places to eat. So make sure that you will make use of the benefits on offer.
Consider the location of your nearest bank branch. Choosing one close to where you live at university could mean that if you run into trouble, you can get in-person help with your account.
You may also value a larger interest-free overdraft, which are common with student accounts. Remember though that an overdraft is still debt, and you’ll need to pay it back one day. Below we’ve listed the top student bank accounts based on the longest 0% overdraft period.
Read more: Everything you need to know about student finance and how to apply
Nationwide Building Society – FlexStudent
• £100 cash
• £120 worth of JustEat vouchers
To qualify for the offer you’ll need to pay in £500 into your account before 13 December
Halifax – Student Current Account
Santander – Edge Student current account
You’ll need to sign up and deposit at least £500 into your account before 30 September. In addition, another 30 students will win £9,250. Ts&Cs apply
About the account
Santander’s Edge Student Current Account is a popular option among regular railway users. It offers:
– A free four-year 16-25 Railcard (worth £100), saving one third on rail in Great Britain
plus a total average saving of £728 (average saving of £182 per year)
– Get cashback, vouchers, prize draws and other offers personalised with
Santander Boosts
– If you’re trying to be better with your money, My Money Manager is a great tool. It provides information about where your money goes and shares personalised insights on your spending habits
There is no interest charged. The first £1500 is interest and charge free for 3 years followed by £1800 interest and charge free for the next year followed by £2000 interest and charge free for the next year. You need to put in £500 in the account every 4 months to maintain the account
Barclays – Student Additions (Travel Plus) Ex/C
HSBC – Student Bank Account
Best student accounts with freebies
If a student bank account with a generous overdraft arrangement isn’t of value to you, then choosing a provider with a valuable set of freebies might be best.
While we’ve already touched on some of these perks in the table above, below we’ve listed the top deals to come out in 2024
| Bank | Perk |
| Nationwide | £100 cashback and £120 of Just Eat vouchers |
| NatWest | A tastecard which is valid for four years |
| Santander | Free 16-25 Railcard which is valid for four years. Plus, you could win up to £27,750 |
Read more: The best current account switching offers
Best bank accounts for international students
As an international student who is yet to arrive in the UK, you may find some of your choices are restricted. That’s largely because if you’re applying for a bank account with an overdraft facility your provider will need to perform a credit check to process your application.
If you haven’t arrived in the UK yet, or if you haven’t lived in the country for long, the search will yield a blank slate and there’s a high chance your application will be rejected.
That’s why you may wish to consider your options carefully when organising your finances. A basic bank account could be one of the easiest of these to open, and we list some of the best options here. A handful of these banks allow you to open your account online, if you have a proof of address at hand.
Once you do arrive in the UK, some of the accounts mentioned above can be opened by international students. So, it may be worth making alternative arrangements and once you arrive you can take advantage of some of the offers with perks.
Read more: Student discounts: how to get them and our top picks, including Asos and Apple
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What do I need to open a student bank account?
Part-time or full-time student bank accounts are very similar to a standard current account but are specially designed for those in higher education.
You need to be 18 or over to get an overdraft, but some banks will let you open a student account with them when you are 17.
In order to be accepted for an account, you will need to show the bank:
- Your UCAS confirmation letter, with an unconditional offer
- Proof of address
- ID such as a passport
If your offer is conditional then you will need to supply the bank with a letter from your university confirming your place or your A-level results.
Opening your account can take place once you have provided the bank with all the information it requires and you have gone through credit scoring checks.
Once you have graduated, most banks will automatically turn your student account into a graduate bank account. This will offer a way of repaying your overdraft over a set period.
Heading off to university soon? Check out our preparing for university checklist.
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Is it worth getting a student bank account?
You don’t actually need to open a student account if you are in higher education, but it might be worth having one.
Here are some of the benefits of opening your account:
- Day to day banking: you need a bank account if you are getting a maintenance loan, job or paying bills (the part of your student loan that covers tuition fees will go directly to the institution where you are studying, not to you)
- Interest free overdraft: provides an excellent security blanket in case you need extra cash
- Perks: the accounts also tend to offer pretty good freebies, such as discount rail travel or gift cards
What to look out for when choosing a student bank account
There are things to watch out for and consider when choosing a student account:
- Don’t be swayed solely by the freebies and discounts
- Do your homework and choose the account that is right for you and your needs
- Look out for building societies or banks offering “up to” such an overdraft limit and not “guaranteed” facilities
- Research savings account to save up money
- Make sure you fully understand the overdraft repayment conditions
- Beware of the ”up-sell” – many banks, once they have you on their books, will try to encourage you to take out other products, such as loans or credit cards
Find out more in our guide to student finances.
What happens to my student bank account when I graduate?
Once you graduate, most banks will move your account to a graduate account. The main incentive to take out one of these accounts is if you’re still in overdraft. Many of these banks still offer an interest free overdraft – so it can help extend your buffer and give you more time to pay off your debt.
If you’ve paid off your overdraft, then it’s worth looking at other current accounts which could work better for you. This might be a high-interest current account which pays interest on your balance or a bank with a lucrative cash switching offer.
Student overdraft explained
A 0% overdraft feature can be appealing for some students. Especially at a stage when you may be short on cash, it can be helpful to dip into the red without any penalties.
But remember, at some point you’ll need to pay this money back and get into a positive balance.
Will I get the maximum overdraft?
Your overdraft limit will largely depend on your credit score. Compared to other applicants, those with poorer credit scores can be offered less favourable terms.
What happens if I exceed my overdraft?
This depends on your banking provider. Some banks will allow you to exceed your overdraft but then charge you a penalty for going over. This can be a daily charge until you go back into your limit.
Other banks will simply decline your transaction if it’s going to exceed your limit.
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Can a student have two bank accounts?
In theory, you can open multiple student bank accounts. However, most banks and building societies state in their terms and conditions that you need to be exclusive to them.
If you have opened a student bank account and already used up your overdraft facility, it may be tempting to open another, but taking on more debt is rarely sensible.
Debt can spiral out of control and could have a disastrous effect on your credit score. We explain more here.
If you are struggling financially, speak to your university.
We have lots more tips on how to make your money go further in our guide to budgeting.
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