Student bank accounts

Heading to uni in September? Get ready with a great student current account and a whole lot of freebies.


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Uni acceptance letter? Check. Student accommodation? Check. Vague feeling of dread because you’re about to move out and become a responsible person (sort of)? Check. Great, it’s now time to get yourself a bank account.

Student accounts can come packed with freebies and rewards to lure you in, so it’s worth shopping around. From railcards to tastecards to upfront cash, there’s no reason for you not to make the most out of your student status.

How are student bank accounts different from regular current accounts?

Student bank accounts are, by all means, full current accounts and not very different from adults’ accounts: they do all you can expect, from providing you with a debit card to letting you set up standing orders and direct debits.

However, they’re tailored to your student life, offering great benefits and freebies. Unlike standard accounts, most student accounts also offer a 0% overdraft.

Banks are generous with these accounts because in most cases your student account will be your very first bank account; so they use it as a way to attract new customers that they hope to keep for life.

Student bank account overdraft

One of the core features of student bank accounts is the 0% overdraft. It means that you can spend more than you have in your account without being charged any interest, which is great because students’ income is not always as constant as, say, an employee’s salary.

You’ll be credit-checked when you apply for it, but don’t worry too much: as a student, banks won’t expect you to have a massive credit history anyway.

The limit of your student account overdraft will usually increase for each year of university; by the third year, it can be pretty high, sometimes up to £3,000. You’ll need to request the increase though.

As we said, overdrafts are great and mean you can get extra money for your Christmas gifts or for a special night out, but don’t forget that you’re still borrowing money and will have to pay it back at some point.

Student bank account freebies

Even if you’re not planning on touching your overdraft (wise resolution!), student accounts can offer a variety of other benefits to choose among. Here is a (by no means complete) list:

  • Interest on your balance. Up to a certain limit. Great if you think you’ll be able to stay in credit most of the time.
  • Transport discounts. Some accounts come with a free 16-25 railcard, which would normally cost you £30 a year and features a 1/3 discount on all rail fares in the UK. If you’d rather travel on four wheels, you may also be able to get a coachcard.
  • Cash upfront. A sort of sign-up bonus to lure you in. Cash isn’t an especially fancy reward, but it’s often better value for money than other benefits you don’t know how much you’ll be able to take advantage of.
  • Discounts and other freebies. Some accounts offer dedicated discounts at certain retailers or restaurants, or cashback options.

How to find the best current account for you

Here’s our little recipe to find a student bank account that works for your needs:

  • Look for the best overdraft. Unless you’re a budgeting pro (we know you’re not), it’ll come handy at some point of your student life.
  • Pick your favourite benefits. And try to work out how much they’re worth to you: how much would they save you in a year? How often would you be able to take advantage of them?
  • Don’t worry about having a bank branch close. Who banks in person anyway, these days?
  • Do worry about how good the banking app is. You don’t know it yet, but a clunky mobile app is your worst personal finance nightmare.

In a nutshell, the dilemma is between best overdraft and best perks. It depends on the kind of person you are; all in all, the overdraft is probably less enticing, but more important, because it gives you great flexibility with your finances.

Finally, cheer up: some accounts offer both a solid overdraft limit and nice perks, which may actually be the best compromise.

4 money saving tips for students

  • Budget and you won’t need an overdraft! Going to uni is all about learning new things and gaining life experience. Why not get a head start and get into some good money habits from your first term?
  • If you need to go for a 0% overdraft. Like we’ve said above, it’s best practice to avoid the overdraft. But… a few big nights out in a row and it’s easy to find yourself there. If this sounds like you (let’s be honest, it does), you want to make sure you’re paying 0% on your overdraft. It’s one of the only times in your life you’ll be able to do this!
  • Don’t go over the overdraft limit. You might have a nice big 0% overdraft, but if you exceed the limit on that – you’re in trouble. Banks will start charging you for every day you’re over the limit, so watch out!
  • Switch to a graduate account when you’ve graduated. You should aim to pay off the overdraft ASAP. When you’ve finished uni, switch to a graduate account with good rates and terms that will allow you to pay off the debt.

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