The Best Student Bank Accounts For Managing Your Finances
Before You Open A Student Bank Account
Suppose you’re planning to enter higher education at University or College or are about to start. In that case, it’s a good idea to open a student bank account and enter the world of financial planning and managing budgets while you study.
The good news is there are many benefits to having one such as:
- Interest-free overdrafts.
- Travel perks such as discounted or railway network cards.
- Cashback rewards whereby you receive £100 cash as an example.
- And interest payable up to 5% of your account total.
They’re designed to allow money to be paid in and out whilst providing tailored incentives which appeal to students vs those who are no longer in education. Let’s dive right in and take a look at the best student bank account options available, today.
Student Bank Accounts Available
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Santander 123 Student Current Account
Considered by many to be one of the best student bank accounts but there are some specific requirements in order to open a student bank account with Santander.
- Firstly, you must be 18 or older and permanently live in the UK.
- You’re studying or about to start studying for a minimum of 2 years.
- Or studying for a level 4 to 7 apprenticeship.
- If you’re about to start then you need to have proof of an unconditional or confirmed offer.
- You must pay in at least £500 for each academic term.
Santander – Rewards and benefits
- 1/3 Off 16-25 Railcard for 4-year travel across Great Britain
- Interest-free overdraft limit of £1500 in the first 3 years
- £1800 in year 4 and £2000 if you’re studying for a 5th year
- Other incentives are cashback, vouchers and prize draws, plus no fees for international cash machine withdrawal when you use Santander machines
Nationwide Flexstudent Account
Opening a Nationwide student account is very popular as your student account grows with you depending on your student status. Much like other leading student accounts, your eligibility depends on whether you meet some of the following criteria.
- Be 18 or over and have lived in the UK for a minimum of 3 years.
- You do not have an existing account with another building society or bank.
- Have confirmation or an unconditional UCAS offer letter course for at least 2 years.
- Apply within 5 months prior or 12 months of beginning your course.
- You need to pay in at least £500 per term which can be from your student loan.
nationwide – Rewards and benefits
- Interest-free arranged overdraft limit of £1000 in your first year
- Up to £2000 in your second year and £3000 in your third year
- £100 cash payable into your account (terms apply)
- Have your say in the community society boards and housing charities
- Upgrade to a graduate account (FlexGraduate) when you finish being a UK student
- Become eligible for a Flex Instant Saver where you can earn appealing interest on balances
HSBC Student Bank Account
HSBC’s student option has a couple of incentives to attract students which makes it one of the top 3 options currently in the UK. The main perk is no minimum amount to be paid in unlike most of the others.
If you’re a student or planning on studying in the near future then you’re more than likely going to be on a budget and looking for cashback rewards and working towards building up your credit score once your student banking profile has surpassed. To qualify you must:
- Be 18 or over and have lived in the UK, Channel Islands and Isle of Man for 3 years.
- Provide proof of address and enter your 16-digit UCAS code.
- Not have another student bank account with another bank.
HSBC – Rewards and benefits
- Earn £100 cash on 5 qualifying transactions within the first 30 days on your debit card
- Interest-free overdraft limit of £1000 in your first year
- £2000 in your second year and £3000 in your third year (subject to usage terms)
- Receive rewards for ASOS, BooHoo, Costa Coffee and other leading retailers
- Pay friends using their mobile numbers via the app
Starling Bank Current Account
Starling Bank has won many awards for its mobile-only banking, app features and simplifying banking for personal and business use.
Not strictly a student bank account but many students can apply and open a current account much easier than the other banks. Let’s take a look at some of the quality checks and features.
- You must have lived in the Uk for at least 6 months.
- Provide a valid form of ID such as your passport, proof of address, and date of birth.
- Video yourself speaking in some cases to provide an accurate visual.
- Have 5 minutes spare to apply. No, really! It’s that quick.
- Please note: Starling does not have the same 0% interest-free overdraft options as a dedicated student bank account. Full details can be found below.
Starling – Rewards and benefits
- Best current account award winner 2022
- Multiple app features for managing your finances
- Temporary debit card lock and unlock feature if you misplace your card
- Split your bill with flatmates via the app
- Integrations with reward apps such as MoneyBox
- 0.05% interest payable up to £85,000
- No minimum monthly deposit
- No monthly charges (including international usage)
Monzo Bank Current Account
The direct competitor of Starling is Monzo. Monzo is also an award-winning mobile-only bank with similar features via its dedicated app.
Again, not strictly a student account but opening your account is very straightforward and doesn’t require you to visit a branch as there aren’t any! To open a current account you’ll need:
- Be 18 or over living in the UK and provide proof of address with valid ID.
- Record yourself stating you’d like to open an account with Monzo.
- Please note: Monzo does not have the same 0% interest-free overdraft options.
Monzo – Rewards and benefits
- Excellent app usability and insights into your spending and budgeting
- Flex pay alternative to credit cards whereby you can pay via instalments on transactions
- Scheduled payment reports for committed spending
- Splitting bills with household members
- Refer a friend and receive £5 as a reward for you and them
- Send money to your phone contacts who have a Monzo account
- Optional upgrade to Monzo Plus and Premium for £5 and £15 per month (features include: 1% interest payable up to £2000, travel and device insurance with premium).
Barclays Student Additions Account
Barclays student account offering isn’t as appealing as some of the others as there aren’t many included benefits other than a set incremental overdraft limit and a quick approval process when you sign up.
They do, however, allow you to open the account and cancel within 14 days in case you change your mind. You might also be eligible for some of the ongoing Apple subscription promotions available to regular account holders. To qualify you must:
- Be 18 or over and have lived in the UK for at least 3 years.
- Have your approval letter from your university or college.
- Only use Barclays as your primary account for your student loan and incoming payments.
- Studying full-time (terms do not state if you can apply prior to starting).
- Be on a 2-year+ undergraduate course or 1-year+ postgraduate course.
- Level 4 or above apprenticeship.
- Use the app and carry out a full credit check, video recording and valid ID submission.
Barclays – Rewards and benefits
- Interest-free overdraft of £500 upon opening your account
- Up to £1000 in your first year
- Up to £1500 in your second year and above
Lloyds Student Current Account
Lloyds is popular amongst students primarily for the cashback rewards incentive when using your debit card. You’re eligible for large discounts at many leading high-street retailers.
To open a student current account you will need:
- To be 17 or over and have lived in the UK for 3 years or more.
- Studying full time on a 2-year minimum course.
- Or on a 1-year full-time access course leading up to your degree.
- Have your proof of address, valid ID and UCAS number ready.
Lloyds – Rewards and benefits
- Interest-free overdraft limit of £500 for 6 months
- £1000 in months 7-9 and £1500 from months 10 and upwards
- £2000 is available if you’re planning to study for 4-6 years
- Up to 15% cashback from retailers such as Co-op, Costa Coffee, Sky, Just Eat & Sainsbury’s
Natwest Student Current Account
Natwest delivers plenty of perks when you choose to open a student current account with them which is why they are one of the most popular with students.
Cashback, dining out and cinema tickets are just some of the incentives to attract people. And they’re doing a pretty good job as a result. To open an account you’ll need:
- To be 17 or above to qualify (only 18+ are eligible for overdraft limits).
- A UK citizen or have lived in the UK for at least 3 years.
- Provide proof of address and present valid forms of ID.
- Provide evidence of your acceptance onto an undergraduate or postgraduate course.
- Or nursing course for a minimum of 1 year.
Natwest – Rewards and benefits
- Receive £80 cash after successfully being approved
- Receive a 4-year tastecard worth £39.99 per year
- Interest-free overdraft of up to £2000 (£500 for the first year)
TSB Student Bank Account
Not considered by many due to other big names in banking overpowering market share is TSB. However, they come out on top in one particular area so there’s a reason they’re on the shortlist.
To open a student account with TSB you’ll need:
- To be 17 or above (18+ are eligible for an overdraft).
- Be on a 1-year access course or studying for a full-time degree for 2 years and above.
- Provide the regular validation documents with your ID and your UCAS number.
TSB – Rewards and benefits
- £500 interest-free overdraft for the first 6 months
- £1000 for months 7-9 and £1500 after 10 months or over
- 4.89% interest payable on balances up to £500
Which Student Bank Account Is Right For Me?
Consider what is more important to you as a student. If you are wanting as many rewards and cashback offers as possible then you are going to lean towards either of these current accounts:
If you are looking to earn the highest interest then you going to look towards TSB which pays the highest rate at 4.89%.
If you are looking for the largest overdraft limit of up to £3000 then either:
It’s important to understand an overdraft is a short-term loan and failure to meet payment deadlines can result in your credit score being drastically affected.
Speak to your chosen bank if you have any questions related to short-term and long-term lending.
If you are wanting the best reporting and budget insights via the app then either:
You will also find that splitting bills and paying flatmates or classmates is very simple with either of these two banks, too. Just remember that the 0% interest offers aren’t applicable as they aren’t specific student accounts.
What Happens To My Student Account After I Graduate?
If you choose a dedicated student bank account from one of the leading banks, once you have finished your degree, they will migrate your account to either a graduate account or a regular current account.
You may receive a new bank card or you might be eligible to use your existing debit card and pin. Your chosen bank will provide you with further details when the time comes.
If you are with the Bank Of Scotland or RBS for example then similar terms apply to students.
Conclusion
Starting a new chapter in further or higher education is filled with excitement and anxiety all rolled into one. Becoming a grown-up and opening up your first bank may feel like a big step.
Thankfully, times have changed compared to the old days when you had to go into a branch and fill out multiple forms and then wait weeks and sometimes months for approval.
By using our overview to see which bank is right for you, follow the online instructions to begin your application. Most banks allow a cooling-off period if you change your mind and you can always speak to support before committing. It’s not as daunting as it may seem.
Good luck, you got this!
