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 try to make a withdrawal at any HSBC cash machine that would take you over your overdraft limit, you’ll get an on-screen alert to let you know how much money you have available to withdraw.

Extras: You can apply for a student credit card with a credit limit of £500 (18.9% APR) and access discounts on the student exclusives website. There’s a free £80 Amazon.co.uk Gift Card and 12 months of Amazon Prime Student benefits. To get this offer, the account must be opened by 31 December 2018.

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: You can apply online or book an appointment online to open your 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 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 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 interest free when 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 register for online banking.

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

Opening the account: You can begin your application online, but will need to visit a branch once your application is successful. You will need to bring with you your UCAS confirmation (original or a print out), proof of ID, such us a passport or driving licence and proof of address (dated within the last six months).

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. 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 beyond your planned overdraft, you’ll be charged 1p a day for every £7 that you borrow.

Extras: You can 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 that. Beware that you must pay £750 into your account every six months and make at least three transactions every month.

SAVVY TIP: this is last year’s student account. The 2018 – 19 student account launches on the 6th August. We will update this page with new information when it is available.

Cost of borrowing more: If you go over your arranged overdraft, you may have to pay an unarranged overdraft usage fee of £8 a day, up to a maximum of £72 (nine daily fees) in a charging period.  They won’t charge you more than £80 in a monthly charging period for an unarranged overdraft or any unpaid transactions. Interest is paid on any amount over the interest-free limit at a representative rate of 16.5% APR in a year.

Extras: Free National Express Young Person’s Coachcard for four years (normal cost is £30 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.

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 can open your account online, but will need to provide your UCAS number, address, mobile telephone number, email and ID.

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. Beware that you must pay £750 into your account every six months and make at least three transactions every month.

SAVVY TIP: this is last year’s student account. The 2018 – 19 student account launches on the 6th August. We will update this page with new information when it is available.

Cost of borrowing more: If you go over your arranged overdraft, you may have to pay an unarranged overdraft usage fee of £8 a day, up to a maximum of £72 (nine daily fees) in a charging period.  They won’t charge you more than £80 in a monthly charging period for an unarranged overdraft or any unpaid transactions. Interest is paid on any amount over the interest-free limit at a representative rate of 16.5% APR in a year.

Extras: Free National Express Young Person’s Coachcard for four years (normal cost is £30 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.

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 can open your account online, but will need to provide your UCAS number, address, mobile telephone number, email and ID.

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.

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 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 £1,510, 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: 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% AER 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 guides to student life, available on the TSB website.

Opening an account: As I’m writing (17th July 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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