Homepage » For Students » Bank Accounts - Best Value
 Although most students haven’t got a lot of money their business is still highly prized by the big banks. The basic premise is that at some stage you will grow into a responsible adult with a healthy bank balance, a mortgage and other financial products. If they catch you young they hope to keep hold of you for life!
So, the trick is to take advantage of their early generosity. The most important freebie on offer is the interest free overdraft facility. They may offer you other inducements, such as a free student rail card or a few free music downloads to open an account but these are usually small beer compared to the interest free overdraft. Most of the big banks are offering free overdrafts of up to £2,000, which over one year, could easily save you over £300 in interest charges.
The big high street banks are usually the most generous and are generally offering similar deals. See the table below for current free overdraft limits (as published on their websites April 2008):
Bank |
1st Year up to |
2nd Year up to |
3rd Year up to |
4th Year up to |
5th Year up to |
Barclays |
£1,000 |
£1,250 |
£1,500 |
£1,750 |
£2,000 |
Halifax |
£2,750 |
£2,750 |
£2,750 |
£2,750 |
£2,750 |
HSBC |
£1,000 |
£1,250 |
£1,500 |
£1,750 |
£2,000 |
Lloyds TSB |
£1,500 |
£1,500 |
£1,500 |
£2,000 |
£2,000 |
Nat West |
£1,250 |
£1,400 |
£1,600 |
£1,800 |
£2,000 |
RBS |
£1,250 |
£1,400 |
£1,600 |
£1,800 |
£2,000 |
Some other freebies on offer to students from the major banks are listed below. It should be noted that the big Banks would not normally allow you to take advantage of the benefits of a student account with them, if you have a student account elsewhere.
Barclays:
- An extra £1,000 available on overdraft at preferential rate
- Free mobile phone insurance (1 year)
- National Express Discount card (3 years)
- Click here for website
Halifax:
HSBC:
- £15 UCAS fee refunded if your produce a copy of UCAS letter
- Discounts from CD Wow & Dell Computers
- Click here for website
Lloyds TSB:
- £75 bonus if account used regularly as your main student account
- Free YHA Membership for 1 year
- 35 free music downloads
- Free NUS extra card
- Free mobile phone insurance
- Click here for website
Nat West:
RBS:
- £100 bonus if account used regularly as main student account
- Up to £2,750 interest free overdraft
- Three free albums downloads
- Concert & cinema ticket discounts
- Click here for website
When to Open a Student Account
It's advisable to open your student account well in advance, once you have received an offer through UCAS. You can apply online but will normally be asked to post a copy of your UCAS form plus some form of ID. It's often useful to speak to an advisor in person as they can talk you through the various options their account offers (for example, opening a savings account to hold emergency money). Student loans are paid directly into your account so you should sort out your bank account before term begins.
You may also want to take account of which bank(s) have branches on campus. These days, with ATM machines and Internet banking it’s certainly not necessary to have a branch on campus but nevertheless it may be convenient, particularly if you receive regular cheques from the family.
Don’t, whatever you do, wait until fresher’s week to open your account. Normally only one bank is represented and at the fresher’s fair and you may not get the choice you need for the best deal.
The Cost of Borrowing
You may feel comfortable at the beginning of term with the knowledge that you have a whacking great big overdraft facility in place. But don’t become complacent and beware of the penalties of going over the specified limit, especially without prior agreement.
- If you exceed your overdraft limit with agreement from the bank you will almost certainly be charged interest. The interest charged will probably be for your entire overdraft. You may also incur other charges such as arrangement fees.
- If you exceed your overdraft limit without agreement from the bank your payments may be refused and you will be charged a higher rate of interest on your entire overdraft. You will also incur other penalty charges.
If you are struggling with finances it’s far better to try and resolve the issues before you get to the point of your debts getting out of control. For help and advice about finances you should speak to your parents, university advisors, your bank manager or citizen’s advice (probably in that order!).
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