The best student bank accounts: What to look out for

Don’t be balled over by gimmicks and freebies only - sure, getting a free Young Person’s Railcard is quite useful, and you could think of a few cool DVDs to get with the HMV voucher, but you also need to look at the small print. 

Usually, with student current accounts, banks don’t charge account fees, but make sure you look into how long this will last. Some students have complained about banks charging them extra if they are overdrawn whilst at uni, or upon graduating, with banks bringing ‘new’ terms in. The truth is, these terms have always been there, it’s just a question of you understanding the information supplied to you.

The key things to look out for, as a student, are overdraft limits and interest rates. Some banks offer little overdraft, comparatively speaking, yet can extend it to suit your needs - as such, you should speak to your local bank manager first, before signing any documentation. The leading banks, such as HSBC, Santander and Natwest, tend to have the biggest overdraft limits, yet smaller chains such as Co-op can also offer good deals; it boils down to speaking to you a few beforehand. Interest rates usually only kick in once you graduate, with some banks offering at least a year’s respite after you graduate, meaning you have a bit more time to pay whatever you owe back. However, you should look out for high interest rates, with some banks charging as much as 30% if you go over your overdraft limit - pretty steep to say the least! 

Another point to consider is whether you will go to foreign shores, either for a year abroad or travelling. Some banks charge pretty steep commission rates, and will expect you to pay if you use your card to pay; most students choose to take out money in one lump sum, though there are charges for this to so it is wise to read the terms and conditions before going away. Additionally, international banks may offer the chance to open up a bank account abroad, during your time there, without all the paperwork - if you’re planning on studying with a year abroad, you should speak to HSBC and Santander to find out more.

As most students will undoubtedly run into their overdraft over the course of their degree, it is worth checking whether your overdraft limit will increase as you further your university career. Whereas some banks offer a flat overdraft limit, others increase it in tiers as the years go on. You should also ask about Masters - should you wish to pursue an academic career, what structure would follow? As most student accounts tend to last 3 to 4 years, depending on the length of your undergraduate degree, you should inquire as to what charges you may or may not incur should you choose to carry on with higher education. 

Should you be fortunate enough to be in credit over your university life, you should ask about the interest paid into your account - most rates are pretty lousy, though smaller chains may offer a better deal.

In short, students should speak to their local bank managers about what student accounts are available, with the view to keep their accounts post-graduation: though you may intend to move banks, some students are unable to do so as they have an overdraft to pay off come final year. 

More info about the HSBC Student Account
More info about the Santander Student Account
More info about the Lloyds TSB Student Account
More info about the Natwest Student Account
More info about the Halifax Student Account