Best Student Bank Accounts

The student life can often be an expensive one. Not only do you have to worry about high tuition fees, but you also have to take accommodation, food, beer, and other living costs into account.

The right student account can go a long way in helping you reduce your outgoings. But which are the best bank accounts for students?

In this article, we take you through everything you need to know about choosing the right bank account for you. This guide includes information about what you should look for, as well as detail some of the institutions we think offer great value.

What Is a Student Account?

Although (obviously, you may say) a student account is a bank account specifically for students, there are a few differences that make them well-suited to those in higher education. These are bank accounts and not credit cards for students.

They often have a range of benefits specifically for students, such as an interest-free overdraft. If you’re starting at university or planning to soon, you should definitely consider getting one.

You can pay money in and draw it like, just like with a regular account. However, there is the added security of an overdraft should you need it. Many students stick with their regular bank services when they go to university, but this can be costly in the long run.

Instead, you should sign up for a student account as soon as you can. It’s even possible to reap the benefits of doing so before you actually go to university.

The stipulations on how much overdraft you get, the interest on it, and how long you can access it for differ for each bank. We’ll cover this in greater detail further down.

What Makes a Good Student Account?

There are a few elements that make for a good student account. Perhaps the most important one, as we’ve mentioned, is the overdraft. Many people in higher education will rely on this interest-free loan.

When you’re checking out potential institutions to bank with, check whether the overdraft they offer is ‘guaranteed’ or ‘up to’. Some accounts will depend on a credit check for how much you get.

Some banks will give you a fixed overdraft throughout your three-year undergrad. Others will increase it each year. The one you choose should reflect your needs. Many people find it comforting to know their credit will be extended each year.

Most of the top high-street banks will be vying for your business. Each has their own selection of incentives to entice you in. These range from vouchers, memberships, and cashback, to railcards, exclusive discounts, and low interest. Again, choose the one that best meets your needs.

How Do I Choose the Right Student Account for Me?

The first thing you need to do is thoroughly research what’s on offer.

The fact you’re reading this article is a very good start. You have plenty of options to choose from, so take your time in finding the one that’s right for you.

Start by setting out a budget for your student needs. Account for how much you’ll need to pay in tuition, accommodation, food, mobile phone, entertainment, and nights out. Balance this against the amount you’ll receive from student loans, grants, savings, parents, and employment.

Once you have a proper budget, you can account for how much extra you may need. Although an overdraft is a great way of improving your cash flow situation while you study, don’t forget that it’s only a loan. At some point you will have to pay it back, and once you graduate you may start incurring interest on it after a while.

In addition to the overdraft, look at the other incentives too. Do you tend to use your debit card a lot? If so, a bank with a high cashback percentage could be a tempting prospect. Similarly, if you know you’ll be travelling by train a lot, a railcard is essential, and some accounts come with a 4-year one.

It is, of course, impossible to know exactly what your circumstances at university will be like until you get there, but proper planning can save you a lot of time, hassle, and money in the long run.

What Do I Need to Open a Student Bank Account?

There are a few pieces of ID and paperwork you will need to get started with a student account. As with most banks, you will need basics such as one or two forms of photo ID. These can include a driving licence or passport.

You’ll also need proof of address from something like a recent utility bill. If you’re not sure exactly where you’ll be living while you study, you can always change the address on your account once you have it confirmed.

To be accepted for a student account, you will, of course, have to prove you’re a student or that you’re going to be one soon. Your UCAS confirmation letter should suffice. However, if your letter is a conditional one, you may need to show proof of you’re A-Level results or a confirmation letter from the institution you’ll be attending.

You’ll likely have a few weeks or months after your acceptance to set up your account, and doing so early means you can access the benefits early too.

Best Student Bank Accounts in 2023

We’ve taken a look at the main high-street institutions to see what they have on offer.

Below, we’ve outlined the pros and cons of each account, and what it is that we like about them. This should give you a clearer idea of which bank is the right one for you.

1. Santander 123 Student Account

Pros

✔️ Interest-free overdraft of £1,500 for years 1-3.

✔️ Free 4-year 16-25 railcard.

✔️ Up to 3% interest when in-credit.

Cons

❌️ Overdraft limit is less than many competitors.

Visit Santander

Why we like it

Santander has consistently gained glowing reviews for their student account. The interest-free overdraft is a big draw, giving a consistent £1,500 limit through years 1-3 of university. If you stay an additional year, it’s raised to £1,800, and if you stay for a fifth, it reaches £2,000.

The only downside is that to qualify for the full amount you have to pay in at least £500 a year. This element shouldn’t be a problem if your student loan payments go into the same account though.

The other main bonus that sells this product is the free 4-year railcard. If you’re going to be travelling a lot, you could save 1/3 off rail travel in the UK. They’re usually around £30 a year, so that’s quite a saving.

With this account, you also qualify for some fairly generous interest payments. You’ll get 3% AER on your in-credit balance of £300-£2,000. Finally, once you graduate, you’ll be automatically migrated to a Graduate Account, which includes a £2,000 interest-free overdraft.

However, as we’ll see, the £1,500 overdraft for years 1-3 is quite a lot lower than some of the other accounts on offer. If you think you’re going to need the extra access to cash and won’t use the railcard, then you may want to consider an alternative.

2. NatWest Student Account

Pros

✔️ Up to £2,000 interest-free overdraft.

✔️ Attractive choice of incentives.

✔️ Excellent banking app.

Cons

❌️ Overdraft subject to status and limited at first.

Visit NatWest

Why we like it

NatWest aims to give you the freedom of choice. There are three options you can choose from when it comes to incentives. Perhaps the most appealing (or practical) is the 4-year National Express Coachcard. This gives you 1/3 off fares in the UK, as well as 15% off travel to various events and festivals.

The second option is a tastecard, which gives money off different food and entertainment venues and is valid for four years. A third attractive, although possibly not sensible, option is a year’s subscription to Amazon Prime Student and £10 Amazon gift card.

The overdraft with NatWest accounts is also quite appealing. Students get an interest-free £500 overdraft in their first term, which can rise to £2,000 after that depending on status. If you can manage your first semester with such a small amount, it can be quite useful. If not, then there are also some other banks that give better access.

NatWest also has an excellent banking app that makes managing your finances a breeze.

3. HSBC Student Account

Pros

✔️ Guaranteed £1,000 overdraft, potentially increasing to £3,000.

✔️ £80 Amazon gift card and 12 months’ of Amazon Prime Student.

✔️ 3% AER on in-credit balance up to £3,000.

Cons

❌️ No transport card or 4-year incentive.

Visit HSBC

Why we like it

HSBC offers a lot of support to students, not only with this account. There are plenty of credit card, insurance, and savings features that help you to manage your money. Perhaps most attractive is the guaranteed 0% EAR £1,000 overdraft. This is given to all students who open an account with HSBC.

Depending on your status and account conduct, this can rise to £2,000 in your second year and £3,000 in your third. This is one of the most generous overdrafts out there.

The Amazon gift card and 12 months’ of Prime are a nice incentive for those who will use them. However, if you travel a lot by rail or bus, another account with a rail or coach pass could be more beneficial.

If you’re planning on saving plenty of money while you study, the 3% AER/gross preferential rate over 12 months is an appealing prospect. There are some caveats to this, but the budget-conscious could benefit from this greatly.

4. Nationwide FlexStudent Account

Pros

✔️ Up to £3,000 interest-free overdraft.

✔️ 1% in-credit interest up to £1,000.

Cons

❌️ No bonus incentives.

Visit Nationwide

Why we like it

Nationwide is often ranked high in terms of customer service, particularly by students. The main appeal of this account is the overdraft, which can potentially reach as high as £3,000 after three years. You can apply online within two months either side of your course start date, giving you the opportunity to take advantage of the account in advance.

To qualify for the overdraft, you have to pay in £500 each term after you sign up. However, if you do then the overdraft amount is guaranteed, rather than ‘up to’ as we’ve seen with others.

The 1% AER/gross rate up to £1,000 is quite useful but is not as generous as with some other accounts we’ve seen. Also, there are no extra incentives to appeal to students, so if you absolutely need a railcard or similar, you should choose another bank.

5. Royal Bank of Scotland Student Account

Pros

✔️ Up to £2,000 overdraft.

✔️ Choice of three sign up incentives.

Cons

❌️ Overdraft limited for first term.

Visit Royal Bank of Scotland

Why we like it

RBS’s offer is essentially the same as NatWest’s. You can choose between a year of Amazon Prime Student, National Express Coachcard, or a tastecard for your incentive.

A £2,000 overdraft is on offer, but this is limited to just £500 for your first term at university. The increase is then subject to status.

6. Halifax Student Account

Pros

✔️ £1,500 overdraft for duration of course.

✔️ 1% AER/gross interest when in-credit.

Cons

❌️ No extras.

❌️ Overdraft rate is variable.

Visit Halifax

Why you might consider it

Although Halifax doesn’t offer any flashy incentives, they have proven to be a useful bank for students at times. The overdraft of £1,500 is fixed for the duration of your course and can be extended for a year after you graduate.

Unfortunately, the amount you’ll receive will depend on your circumstances. Furthermore, their credit interest rate of 0.10% AER is considerably less than other banks we’ve looked at.

7. Lloyds Bank Student Account

Pros

✔️ Overdraft of up to £1,500 for years 1-3.

✔️ Good range of cashback offers.

Cons

❌️ Overdraft isn’t guaranteed.

Visit Lloyds Bank

Why you might consider it

Lloyds used to offer students a free NUS Extra card, which was quite an attractive incentive. However, they currently don’t, which is a shame. Their overdraft is fairly average; up to £1,500 for the duration of a three-year course, increasing to £2,000 if you stay 4-6 years.

Student Bank Account Top Tips

Now that you’re familiar with some of the products on offer, we’ve shared our student bank account wisdom, below:

• Choose your incentive wisely. A year worth of Amazon Prime does sound appealing, but many students travel to and from university via train. If you know you’ll be using the rail service or coach service regularly, a 16-25 railcard or Coachcard could save you a lot more over the three years.
• Choose a large overdraft but use it wisely. The extra access to funds can be incredibly useful during your studies. It’s essentially an interest-free loan. However, be aware that the fees for exceeding your overdraft limit can often be excessive. You’ll also have to pay back the full amount after you graduate.
• Check your credit rating. Most banks will run a credit check when you apply for an overdraft. Check on your score ahead of time so that you have a better idea of where you stand financially.
• Budget. We mentioned this at the start of the article, but it’s important that you at least try and budget. The last thing you want is to run out of funds before your course is over.

Related Guides:

• Best Joint Bank Accounts
• Best Online-Only Bank Accounts
• Best Basic Bank Accounts