The best student bank account for 2017-18

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If you’re off to university, which student bank account should you choose? Pick the right one and you could get an interest free overdraft of up to £3,000. Find out which is the best student bank account for 2017-18.

Student bank accounts for 2017 – 18: the biggest interest-free overdrafts

HSBC, Nationwide and Barclays offer the biggest interest-free overdrafts of up to £3,000. Here’s a rundown of what the banks’ student accounts have to offer starting with those offering the largest interest-free overdraft:

HSBC Student Bank Account: £500 to £1,000 interest-free overdraft on account opening for the first year, up to £2,000 in the second year and up to £3,000 in the third year. This account is now also available for level 4+ apprentices in their first year of a qualifying course.

Cost of borrowing more: There are no additional charges for borrowing more than your overdraft, although you’re obviously encouraged not to do this!

Extras: You can apply for a student credit card with a credit limit of £500 (APR 18.9%) and access discounts on the student exclusives website. There’s a free £60 Amazon.co.uk Gift Card and 12 months of Amazon Prime Student benefits if you open the account before October 31st. You can also use HSBC’s online Student Budget Calculator.

Graduate overdraft: £1,500 interest-free overdraft during your first year and £1,000 in your second year after you graduate.

In credit interest: You’ll earn interest of 1.5% over Bank of England base rate on balances of up to £1,000 in the first year.

Opening the account: You can apply online or in your local branch. You have to ring 03457 404 404 in order to book an appointment to open the account in a branch.

Nationwide building society FlexStudent account: interest-free overdraft of up to £3,000. You can get an overdraft of up to £1,000 in your first year, £2,000 in your second year and £3,000 in your third year. You are able to request a change to your overdraft limit at any point (within your maximum available limit) and Nationwide won’t increase it unless you ask them to. You should get this overdraft as long as you pay in at least £500 per term from the date the account is opened, maintain a good credit record and ‘stay in control of your finances’.

Cost of borrowing more: There are no additional charges if you go beyond your agreed student overdraft limit but Nationwide says if you do go over, you’ll need to bring the balance back within your agreed limit before you can carry on using your account.

Extras: You get cashback with ‘Simply Rewards’ on big brands if you pay with your Visa debit or credit card. You can also use Apple, Android Pay and Samsung Pay.

Graduate overdraft: If you’ve completed a three year course, your overdraft is interest-free and fee-free on £2,500 for the first year, £1,750 for the second year and £1,000 for the third year after you graduate.

In credit interest: You can earn interest of 1% on balances up to £1,000.

Opening the account: You have to be 18 years or older to apply for the account and have been accepted for a full-time UCAS course at a UK institution for at least two years. You must be within two months of your course start date (either before or after it’s started). You can apply online and you need to provide details of your course and the university you’re going to.

Barclays’ Student Additions account: fee-free overdraft of £500 when you open your account and up to £3,000 while you’re studying.

Cost of borrowing more: If you go over your arranged overdraft, you can arrange to use their Emergency Borrowing fees service, which give you a buffer of £15. If you go above this, you will pay £5 per day, capped at seven days giving a total of £35 plus three days at 75p giving an overall total of £37.25 per month.

Extras: Save money and get cashback on brands such as Expedia, Boots and Waterstones. You can get a personalised contactless debit card and can use Apple Pay or Contactless Mobile to pay on the go.

Graduate overdraft: For your first year after graduation, you can get a fee-free overdraft of up to £3,000, in the second year up to £2,000 and in the third year up to £1,000. Be careful, daily fees if you exceed this are 50p per day between £1,000 and £1,999.99 and £1 per day over £2,000.

Opening the account: You can apply online, but will need to visit a branch to confirm your student status and identity. You will need to bring your address for the past three years, your place of study and course details, your income details (if you have any) and your employment details (if you have any).

Other student accounts

These are the rest of the accounts on offer, (with a lower overdraft limit) in alphabetical order:

Bank of Scotland Student Account: interest-free and fee-free overdraft of up to £1,500 in years one to three and £2,000 in years four to six. You can go overdrawn by up to £500 in the first six months, £1,000 in months seven to nine and £1,500 after that.

Cost of borrowing more: If you go beyond your planned overdraft, you’ll be charged 8.21% interest, together with a £6 monthly overdraft usage fee. You’ll be charged £5 a day if you go overdrawn without prior permission by between £10 and £24.99, or £10 a day if it’s more than £25 a day. Your daily charges will be capped at eight of these fees a month.

SAVVY TIP: From November 2nd, their overdraft rules are changing so you’ll pay a daily overdraft fee of 1p for every £7 you borrow, over your fee-free amount. You will be charged at the end of each day you use your overdraft.

Extras: NUS Extra card free for three years (normal cost is £12 a year). Cashback of up to 15% on selected purchases with Everyday Offers.

Opening the account: You can apply online, but will need to go to a branch once your application is successful. You will need to bring with you your UCAS confirmation, proof of ID (such as a driving license) and proof of address.

Halifax Student Current Account: interest-free planned overdraft of up to £1,500 for up to five years (if your course lasts that long) plus an extra year interest free when you graduate.

Cost of borrowing more: You pay no interest for a planned overdraft (up to £1,500), or 24.2% a month if it’s unplanned.

SAVVY TIP: From November 2nd, their overdraft rules are changing so you’ll pay a daily overdraft fee of 1p for every £7 you borrow, over £1,500. The fee will be charged at the end of each day you use your overdraft.

Extras: You’ll get a contactless debit card and free text alerts about your account. You can also get up to 15% cashback on your shopping at selected stores, though you have to register for online banking.

In credit interest: You’ll earn 0.10% on any credit balance variable. Interest is paid monthly.

Opening the account: You can begin your application online, but will need to visit a branch once your application is successful. You’ll need an original or print out of your UCAS confirmation, ID such as your driving licence (full or provisional) or your passport and proof of address.

Lloyds Bank Student Account: interest-free and fee-free arranged overdraft of up to £1,500 in years one to three and up to £2,000 in years four to six. In the first six months you can borrow up to £500, and you can get an overdraft of up to £1,000 in months seven to nine. Then from month ten until year three you can ask for an overdraft of £1,500.

Cost of borrowing more: If you go overdrawn beyond your arranged overdraft, you’ll be charged interest at 8.21% a year and you’ll be charged a monthly fee of £6.

SAVVY TIP: From November 2nd, their overdraft rules are changing so you’ll pay a daily overdraft fee of 1p for every £7 you borrow, over your fee-free amount. You will be charged at the end of each day you use your overdraft.

Extras: You’ll get a free NUS Extra card for three years if you open your account before October 31st. You also get up to 15% cashback with Everyday Offers, access to their Mobile Banking App and text alerts about your account.

Graduate overdraft: Your student account will automatically convert to a Graduate Account when you complete your university course. For your first year after graduating you get a fee-free overdraft of £2,000, in your second year you get £1,500 and in your third you get £1,000.

Opening the account: You can apply online but will need to verify your ID in a branch. You don’t need to make an appointment, but need to bring your UCAS confirmation and proof of identity and address.

Natwest Student Bank Account: interest-free arranged overdraft of up to £500 in the first term and up to £2,000 after your first term. You must use your Student Account as your main current account by depositing at least £750 every six months and making at least three debit transactions every month.

Cost of borrowing more: You’ll be charged £8 for a refused payment if there is not enough money in your account. Natwest caps charges at £80 a month for unpaid transactions.

Extras: Free National Express Young Person’s Coachcard for four years (normal cost is £25 for three years if you buy it online), which gives you a third off the cost of coach travel. You have to sign up to online banking and select to receive paperless statements. You can also apply for a student credit card with a credit limit of £500 (18.9% APR).

Graduate overdraft: Interest free overdraft on the first £2,000 for the first year after you graduate.

Opening the account: You can open your account online, but will need to provide your mobile number, a current debit or credit card and be able to upload a valid passport or EU ID card. You will also need to provide you UCAS code, university course, address for the past three years and term time address.

Royal Bank of Scotland Student Bank Account: interest-free arranged overdraft of up to £500 in the first term and up to £2,000 after your first term.

Cost of borrowing more: You’ll be charged £8 for a refused payment if there is not enough money in your account. RBS caps charges at £80 a month for unpaid transactions.

Extras: Free National Express Young Person’s Coachcard for four years (normal cost is £25 for three years if you buy it online), which gives you a third off the cost of coach travel. You have to sign up to online banking and select to receive paperless statements. You can also apply for a student credit card with a credit limit of £500 (18.9% APR).

Graduate overdraft: Interest free overdraft on the first £2,000 for the first year after you graduate.

Opening the account: You can open your account online, but will need to provide your mobile number, a current debit or credit card and be able to upload a valid passport or EU ID card. You will also need to provide you UCAS code, university course, address for the past three years and term time address.

Santander 1|2|3 Student Current Account: interest-free and fee-free arranged overdraft of up to £1,500 in years one to three (rising to £1,800 in year four and £2,000 in year five). You have to pay £500 into your account every term and register for online banking.

Cost of borrowing more: There are fees if payments bounce or if they’re made while you’re overdrawn.

In credit interest: You can earn 3% interest on money you have in your account between £300 and £2,000, 2% on balances from £200 to £300 and 1% on balances of £100 or more.

Extras: You can apply for a free four year 16-25 Railcard, which could save you a third on rail travel. It would cost £70 if you bought it online (for a three year card).

Opening the account: You can apply online or in branch, depending on your circumstances.

TSB Student Bank Account: interest-free and fee-free planned overdraft of up to £1,500.

Cost of borrowing more: There’s a £10 buffer on your overdraft. If you go overdrawn beyond this, you’ll be charged 8.21%.

In credit interest: There’s 5% interest if you’re in credit, up to a limit of £500.

Extras: You can use Apple Pay and Android Pay and apply for a Student Credit Card. There are some savvy guides to student life, available on the TSB website.

Opening an account: You can apply online but you’ll also need to take ID documents to your local branch. It has a (rather lengthy) list of ID documents that it will accept.

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