Banks want you - more than any other group of the population. Students are essentially investing in themselves to (hopefully) get a good salary when they graduate.
Whilst you may be borrowing now to fund your education, banks expect that in the near future you will reap the rewards.
They are looking to establish loyalty, and have good odds at keeping you for life once you’ve opened a student bank account with them. And loyalty is also an important tool for the consumer, meaning students get the best deals and offers out there!
Just remember that you don’t have to be loyal, and you should switch around banks to always benefit from the next best deal. It may seem like too much effort, but it can pay dividends.
Don’t be taken in by freebies. A student bank account with a free MP3 player worth £20 is nowhere near as good as getting an interest free overdraft. An overdraft is a way of borrowing money, up to around £3,000 for final year students. With an interest free overdraft you pay nothing more than what you borrow, and this is pretty much exclusive to us students.
So even if you are lucky enough to have the means to pay without borrowing, it can be worth getting a student overdraft. Take it out and pump up your savings account, earning interest on the borrowed money whilst you’re a student.
Beware that the 0% interest period is not forever! It only lasts a certain number of years after you graduate before it hikes up and you need to pay up, or get screwed. Just as important, don’t go over your student overdraft limit or you could suffer heavy bank charges.
Also, it’s worth noting that the advertised student overdraft limit is the maximum you can get, and usually only in your third year at university.
With a student bank account it largely depends on your ‘credit rating‘, which you can check here for free. When you first open your student bank account you are likely to get around half of the advertised overdraft.
With that in mind, here are the current top student bank accounts taking the overdraft interest free period into account.
For a full list of rankings and more information check out our updated student bank comparison table at studentbankaccounts.co.uk. This table offers extra information on the 8 major student bank accounts offered to students and you can see which may suit you the most.
Remember the top student bank accounts change each year, so make sure you’re still getting the best deal as an existing student and check back here for the best student bank account advice for students.
Other factors to consider
Whilst you may be borrowing now to fund your education, banks expect that in the near future you will reap the rewards.
They are looking to establish loyalty, and have good odds at keeping you for life once you’ve opened a student bank account with them. And loyalty is also an important tool for the consumer, meaning students get the best deals and offers out there!
Just remember that you don’t have to be loyal, and you should switch around banks to always benefit from the next best deal. It may seem like too much effort, but it can pay dividends.
Don’t be taken in by freebies. A student bank account with a free MP3 player worth £20 is nowhere near as good as getting an interest free overdraft. An overdraft is a way of borrowing money, up to around £3,000 for final year students. With an interest free overdraft you pay nothing more than what you borrow, and this is pretty much exclusive to us students.
So even if you are lucky enough to have the means to pay without borrowing, it can be worth getting a student overdraft. Take it out and pump up your savings account, earning interest on the borrowed money whilst you’re a student.
Beware that the 0% interest period is not forever! It only lasts a certain number of years after you graduate before it hikes up and you need to pay up, or get screwed. Just as important, don’t go over your student overdraft limit or you could suffer heavy bank charges.
Also, it’s worth noting that the advertised student overdraft limit is the maximum you can get, and usually only in your third year at university.
With a student bank account it largely depends on your ‘credit rating‘, which you can check here for free. When you first open your student bank account you are likely to get around half of the advertised overdraft.
With that in mind, here are the current top student bank accounts taking the overdraft interest free period into account.
Top Student Bank Accounts 2011/2012
#1 NatWest
The Natwest student bank account has an overdraft up to £2,000 over the three years. The best thing about the Natwest student account is that you get a free 5 year Young Person’s Railcard. If you choose to go to university a long way away from your home town then the railcard could save you £100s over the course of your university education.#2 Royal Bank of Scotland
The Royal Bank of Scotland has moved into second-spot this year in our student bank accounts list, offering an impressive £2,000 overdraft at 0%, which is just below Natwest’s student account, but RBS also throw in a 3-year railcard (two years less than Natwest) which will save you 1/3 on all rail travel. Like the others, the student overdraft limit is an ‘up to’, in your first year you should expect to get closer to £1,250. On top of this you also get a 4 week free bus pass (in Edinburgh, Glasgow or Aberdeen). If you go for this student bank account then let us know how you find it.#3 Halifax / HBOS
The Halifax student bank account has fallen from 1st to 3rd in our rankings this year, but it still offers the highest interest-free overdraft limit with the longest period. The student account offers an overdraft of up to £3,000. Although in your first year you are unlikely to top £1,000. When you apply you automatically get a £500 overdraft, so you need to ask for more. The actual amount you get will depends upon your credit rating (check yours for free). You have one year after graduating to repay before interest starts being added. Don’t forget!For a full list of rankings and more information check out our updated student bank comparison table at studentbankaccounts.co.uk. This table offers extra information on the 8 major student bank accounts offered to students and you can see which may suit you the most.
Remember the top student bank accounts change each year, so make sure you’re still getting the best deal as an existing student and check back here for the best student bank account advice for students.
Other factors to consider
- Does the student bank account come with a debit card or a cash card? You can withdraw from ATMs with both, but only pay in shops or online with a debit card.
- Can you access your student account online?
- Have a look over the bank charges.
- Branch location. A local bank can prove be worthwhile, especially on that rare day when you want or need to make a cash or cheque deposit.
By Owen Burek
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