The best student bank account for 2018-19

The best student bank account for 2018-19

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If you’re off to university, which student bank account should you choose? If it’s an interest-free overdraft you’re after, some will let you borrow up £3,000. Find out which is the best student bank account for 2018-19.

Student bank accounts for 2018 – 19: 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: £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 also available for apprentices in their first year of a qualifying course.

Cost of borrowing more: If you go into an unauthorised overdraft you will not be charged, but you will be required to bring your account back to your agreed limit.

Extras: There’s a free £80 Amazon.co.uk Gift Card and a year’s worth of Amazon Prime Student if you open the account before December 31st 2018. You can apply for a student credit card with a credit limit of £500 (18.9% APR) and if you apply before 15th October 2018, you will get a £20 Amazon.co.uk Gift Card. If you open a Regular Saver (between £25 and £250 per month), you’ll earn 3% interest up to £3,000 for 12 months. You can also access discounts on the student exclusives website.

Graduate overdraft: £1,500 interest-free overdraft during your first year and £1,000 in your second year after you graduate. If you go over your agreed overdraft, you’ll be charged 19.9% EAR.

In credit interest: With the HSBC Regular Saver, which you can apply for with this account, you’ll earn interest of 3% AER on balances of up to £3,000 in the first year.

Opening the account: If you are 18 or over, a UK resident and have accepted a place on a qualifying course you can apply online.

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 should get the increased overdraft each year 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’.

SAVVY TIP: Nationwide say their current account terms and conditions are changing from 8th October 2018. You can read about the changes on their website.

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 card. You can also use Apple, Google Pay and Samsung Pay.

Graduate overdraft: If you’ve completed a three-year course, or longer, 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% AER 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. 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.

Cost of borrowing more: If you go over your arranged overdraft, you won’t be able to withdraw funds from your account. If a direct debit takes you over your arranged overdraft, you will be charged £8 for each transaction.

Extras: Save money and get cashback on brands such as Apple, Boots and Nike. You can get a personalised contactless debit card and can use Apple Pay or Contactless Mobile (up to £100) 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, if you go over your overdraft you will be charged 50p per day up to £2,000 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

Here are the other student bank accounts on offer (with a lower overdraft limit), in alphabetical order:

Bank of Scotland Student Account: 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 1p a day for every £7 that you borrow.

Extras: You can get a free NUS extra card (now called Totum) for up to three years if you apply and open your account before 31st October 2o18. A three year card normally costs £32. You can also get 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 letter or a letter from your university or college confirming your place, proof of ID such as your driving licence and proof of address.

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

Cost of borrowing more: If you go beyond your planned overdraft, you’ll be charged 1p a day for every £7 that you borrow.

Extras: You’ll get a contactless debit card and up to 15% cashback on your shopping at selected stores, once you activate Cashback Extras.

In credit interest: You’ll earn 0.10% AER interest on any credit balance, paid monthly.

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 letter (original or print out), proof of ID and proof of address.

Lloyds Bank Student Account: Fee-free planned overdraft of up to £1,500 in years one to three and up to £2,000 in years four to six.

Cost of borrowing more: If you go beyond your planned overdraft, you’ll be charged 1p a day for every £7 that you borrow.

Extras: You can get a free NUS extra card (now called Totum) for up to three years if you apply and open your account before 31st October 2o18. A three year card normally costs £32.  You can also get up to 15% cashback with Everyday Offers.

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 must be a UK resident, studying full-time on a course of at least two years’ duration, or a one year full time access course leading to a degree.

NatWest Student bank account: Interest-free arranged overdraft of up to £500 in the first term and up to £2,000 after that. You can access your account via their mobile banking app and use GetCash, which is a way to withdraw money in an emergency without a bankcard.

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 £8 a month for unpaid transactions.

Extras: You can choose between one of the following three offers:

  • A free National Express Young Person’s Coachcard for four years (which usually costs £30 for three years if you buy it online). It gives you a third off the cost of coach travel.
  • One year’s Amazon Prime student membership and £10 Amazon.co.uk Gift Card.
  • A tastecard, which gets you 50% off food or two for one meals in thousands of restaurants, valid for four years (smartphone is required). A tastecard usually costs £79.99 for one year.

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, reduced to £1,000 interest free in year two. If you go over your arranged overdraft, the same rates apply as the student account.

Opening the account: You must be aged 17 or over and you must be doing a full-time postgraduate course. You must be 18 or over in order to get an overdraft. The account is only available online.

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 that. You can access your account via their mobile banking app and use the Emergency Cash service, which is a way to withdraw money in an emergency without a bankcard.

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 £8 a month for unpaid transactions.

Extras: You can choose between one of the following three offers:

  • A free National Express Young Person’s Coachcard for four years (which usually costs £30 for three years if you buy it online). It gives you a third off the cost of coach travel.
  • One year’s Amazon Prime student membership and £10 Amazon.co.uk Gift Card.
  • A tastecard, which gets you 50% off food or two for one meals in thousands of restaurants, valid for four years (smartphone is required). A tastecard costs £79.99 for one year.

Graduate overdraft: Interest free overdraft on the first £2,000 for the first year after you graduate, reduced to £1,000 interest free in year two. If you go over your arranged overdraft, the same rates apply as the student account.

Opening the account: You must be aged 17 or over and you must be doing a full-time postgraduate course. You must be 18 or over in order to get an overdraft. The account is only available online.

Santander 1|2|3 Student Current Account: Interest-free and fee-free arranged overdraft of up to £1,500 in years one to three and up to £2,000 if you stay on to year five (if your course is that long). You have to pay £500 into your account every term and register for online banking.

Cost of borrowing more: If you go over your arranged overdraft, you will be charged £5 per day (capped at 10 days in each monthly statement), plus for each transaction £5 if the payment is approved or £10 if it’s not. Santander caps charges at £50 per month.

In credit interest: You can earn 3% AER 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 get 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 £1,510, starting with £500 for the first six months.

SAVVY WARNING!: TSB has been having huge problems after its disastrous IT platform migration in April. Up to 1.9 million TSB customers were locked out of their accounts, others reported fraud on their accounts and some have had problems getting replacement cards. TSB’s Trustpilot rating is currently 0.7 out of 10.

Cost of borrowing more: You’ll be charged interest at 8.21% if you go over your arranged overdraft limit. There is a £10 buffer.

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

Extras: The account offers Apple Pay and Google Pay and mobile banking. You can also apply for a credit card with a £500 limit (19.9% APR).

Opening an account: As I’m writing (22nd August 2018), you cannot currently apply online. You can apply in a branch as long as you bring ID documents. It has a (rather lengthy) list of ID documents that it will accept.

Related articles:

University scholarships in the UK

Your rights when you pay by recurring card payment

How do student loans work? When do you have to repay your student loan?

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