A Guide to Choosing your Student Bank Account

As you will have read in ‘Student Bank Accounts Explained’ it can be hugely beneficial to open a student bank, but the tricky part is choosing which one. It is important to remember, these banks want you! Soon you will be graduates, and graduates have a higher average salary than most and so you are just what the banks are looking for. Therefore, the power is in your hands to choose, and hopefully this unbiased student guide to banks will help you easily compare the difference between what each bank has to offer.

Barclays

Overdraft:

• Up to £2,000.
  • Initially £200 then ask for further increases

Freebies:

• None!! Which we think is a bit mean…

Our Opinion:

• Although Barclays boasts a large limit to the overdraft, in reality it is difficult to get your hands on this unless you have an incredible credit score. The main benefit of Barclays is the smartphone app which allows for mobile banking, however, in our opinion, we would still look elsewhere since not only are you unlikely to get the high overdraft amount, but there are also no good freebies.

Lloyds

Overdraft:

• Up to £1,500 (or £2,000 if you are at university for over 3 years)
• Tiered:
  • First 6 months: £500
  • Months 7-9: £750
  • Beyond that: £1,500
  • 4-6 years: £2,000

Freebies:

• NUS Extra card worth £12 a year, for 3 years, which offers some decent exclusive discounts

Our opinion:

• Although the maximum overdraft is not as much as other banks offer, the chances of getting a large overdraft is much higher. We would recommend Lloyds for those with a poor credit score, as they are known to be more likely than other banks to offer you a higher overdraft than other banks despite of this. Moreover, they have easy internet banking, PhoneBank, and mobile banking, which is very useful.

RBS

Overdraft:

• £1,500
• Tiered
  • First term: £500
  • Second term: £750
  • Third term: £1,000
  • Second year: £1,250
  • Third year: £1,500
• Be aware, you must deposit £750 every 6 months (eg. Your maintenance loan) and make 3 transactions a month to get an overdraft

Freebies:

• Free tastecard worth £80 for 12 months which includes 2-4-1 type discounts at many restaurants, including Pizza Express, GBK and Zizzi
• But, you must apply for paperless billing and online banking to get it
• Emergency cash up to £300 if your card is lost or stolen
• Get Cash from an ATM or pay your contacts just from your phone!

Our opinion:

• With a lower limit to the overdraft than other companies, RBS does not seem like the obvious choice. However, here you are much more likely to get the full overdraft, plus the free tastecard grabs our eye! However, Natwest also offers a very similar deal as you will see below, so perhaps take location into consideration when choosing between these two. 

Natwest

Overdraft:

• Up to £1,500
• Tiered:
  • First term: £500
  • Second term: £750
  • Third term: £1,000
  • Second year: £1,250
  • Third year: £1,500
• Be aware, you must deposit £750 every 6 months (eg. Your maintenance loan) and make 3 transactions a month to get an overdraft

Freebies:

• Free tastecard worth £80 for 12 months which includes 2-4-1 type discounts at many restaurants, including Pizza Express, GBK and Zizzi
• But, you must apply for paperless billing and online banking to get it.
• Mobile phone top-ups at cash machines
• Emergency cash of up to £300 if your card is lost or stolen
• Free four year 16-25 Railcard (if you held an account with them before 1^st June 2011)
• Get Cash from an ATM or pay your contacts just from your phone!

Our opinion:

• Natwest offers a very similar deal to RBS, but that does not mean it is any worse. What could be a deal breaker for you is which bank is nearer to you, as location can make a big difference in your choice.

Santander

Overdraft:

• Up to £1,500 (or £2,000 if your course is up to 5 years)

Freebies:

• A 4-year 16-25 Railcard worth £120, which gives you a third off most rail journeys.

Our opinion:

• Santander provides the best freebie for those who travel to and from university on train, and they have good reviews on their overdraft deal too. However, the Santander may not be the bank for you if you think you might go over your overdraft limit, since they have huge fees of £5 a day for up to 10 months, and paid/unpaid fees of £5/£10 per item if you do not arrange an overdraft extension with them.
• HINT: After the first year, you can change banks yet keep the railcard!!

The Co-operative bank

Overdraft

• First year: £1,400 guaranteed
• Second year: £1,700
• Third year: £2,000

Freebies

• Not even a cuddly toy.

Our opinion

• People are often wary of using the co-operative bank due to recent scandals and solvency worries. However, it consistently scores well in money saving experts service polls, and reviews show that around 90% of applicants get the overdraft amount advertised by third year. Also, if you have bad credit, with the guaranteed first year overdraft of £1,400 is much higher than you will get anywhere else.  

HSBC

Overdraft

• £3,000
  • Initially £500 then ask for further increases.

Freebies

• Free Music downloads. Three album downloads from Sony Music initially, then an extra three every January and July until January 2016.
• £60 Amazon gift voucher

Our opinion

• Despite their huge overdraft limit, in reality feedback shows that most students only get up to £1,000 after the end of year one. Therefore, we would recommend going with a bank with a lower limit, but which is more likely to give you a higher overdraft in reality. However, it is easy to get distracted by the great freebies!

Halifax

Overdraft

• ‘up to £3,000’
  • £1,000 guaranteed

Freebies

• Personalised debit card
• 25% off AA membership for a year

Our opinion

• This guarantee is great, but feedback shows that most students don’t get much higher than £1,000 in the first year. The personalized debit card is also quite cool, and it is worth noting that they have brought out a new banking app for iPhone and Android!

TBS

Overdraft:

• Up to £1,500
• Tiered
  • First 6 months: £500
  • Months 7-9 : £1,000
  • Beyond that: £1,500

Freebies:

• 5% interest on balances up to £500 (which is unlikely)
• £10 overdraft buffer]Free three-year NUS extra card
• £75 off a holiday booking with STA Travel

Our opinion:

• Reviews show that it is hard work to get the full overdraft amount, but if you have a good credit score you are likely to get the full amount by second year. Although TBS’s offer is not bad, we would not recommend choosing TBS since the hassle of dealing with them seems to be quite bad.

Choose what suits you!

So in conclusion a lot of the offers seem to be very similar, and which one you choose depends on what you are looking for (and what your credit score is!). If you have a poor credit score, then we would recommend going with one of the banks which have a lower limit to the overdraft, but a higher chance of getting an increase on your overdraft such as The Co-operative Bank. If you don’t mind the hassle of applying for higher overdraft limits, then go for one which has a high limit but no guarantee. Or if you are a fickle thing, then grab the freebie and run!