Oi freshers! Have you left picking your student account to the absolute last minute? You silly moos. What else have you had to think about over the last few weeks…apart from planning a whole new chapter of your life, that is? When I put it like that, it seems understandable that the boring financial stuff has been put to one side. But procrastinate no more – you WILL need a student bank account and you’ve got to get the best a man/woman/agender person can get. So, lucky for you, I’m here to help. Because I’m nice like that. Read on for a quick guide to my best picks!
Choosing a good student bank account – and managing it well – will be an essential part of life, ESPECIALLY if you’re living away from home for the first time.
But Freshers Week is not the time to start worrying about banking and Freshers Fair won’t be the place to find your current account. Those banks don’t give out sweets/USB disks/branded stationery for nothing.
So do some homework before campus life takes over.
Rachel Springall, finance expert at moneyfacts.co.uk, says:
“As with any bank account, the best deal entirely depends on how someone uses the account. While students could be tempted by an account with perks, it may not end up being the most cost-effective choice over the next few years if they don’t make use of them.”
Savvy students who travel by train – SANTANDER
Santander 123 Student Account is offering a four-year railcard worth £100. It also pays a generous tiered interest rate of up to 3% on up to £2000. The only other in-credit offers are 5% on up to £500 at the TSB and 1% on up to £1000 at Nationwide.
The Santander free overdraft is £250 when you sign up, rising to £1500 during the first year and beyond, and it is said to be awarded to most customers. (But check!)
Downside? This is only half the maximum £3000 overdraft available at HSBC, Halifax, Nationwide and Barclays. In reality, the maximum is a bit of a red herring. These banks are way more likely to grant you a £1000 overdraft, and that’s yer lot. Getting it higher will depend on your credit history and you would need to push for it.
I don’t recommend it. If you can learn to live within your student loan, the overdraft should only be a safety valve and not a regular borrowing facility.
Those who need a little bit of help and like their entertainment – HSBC
HSBC offers a £60 Amazon card and 12-month Prime membership (though students can get six months free anyway). You will also see your overdraft increased to £3000 over your degree but only if your credit history is sound. And at least HSBC recognises the dangers by not allowing students to exceed the limit, freezing the account rather than slapping on hefty charges for transgressions as the other banks do.
Modest borrowers who travel by coach – RBS
Among the few perks around, RBS offers a four-year National Express coachcard worth £27. Its maximum overdraft of 2K is also likely to be awarded by the second year. BUT
You don’t need to go crazy on overdraft limits!
Ms Springall says:
A sizeable overdraft can be all too much of a temptation, but it will need to be repaid when students graduate, so using it sparingly is important. There are some accounts which spread the overdraft facility to students over the years of their study, which can be a much more sensible option for some.
Even if you do flirt with the red, £1000 should be enough. Always make sure you are getting the maximum amount of funding support available to you and check that there aren’t any quirky scholarships you could be eligible for.
You can also buff up your credit rating if you pay those bills on time, register on the electoral roll in your new location, and avoid any gratuitous borrowing that a bank may view as you Not Coping.
Ms Springall says: “If it is possible to fit in during the years of study, then getting a part-time job throughout breaks would be a great way to earn an income and reduce what they may owe on their overdraft.”
You might also benefit from a specialist millennial banking app like Starling, which allows you to set daily and weekly budgets. Its pre-paid card links up to an account on your phone, so that every time you spend money, you’ll see how much you’ve got left to spend.