NSMW16 – A guide to student bank accounts and overdrafts


Setting up a bank account is a hassle for most students, especially if you’re an international student. Getting the hang of the different banks in the UK and choosing one that fits you is definitely not the easiest thing, but we’re here to ease your burden! In support of the National Student Money Week campaign run by NASMA, we’ve put together a short guide of five popular student bank accounts and attractive overdraft arrangements.

(Don’t know what an overdraft is? Scroll to the bottom to find out!)

Santander: 123 Student Current Account

As long as £500 goes into your account each academic term, and you register for Online Banking, you can get a free 4-year Santander 16-25 Railcard which could save you 1/3 off rail travel in Great Britain. What are you waiting for?

What’s more, this account provides an interest-free and fee-free arranged overdraft, up to £1,500 in years 1-3, then up to £2,000 if you stay on to year 5.

HSBC: HSBC Student Bank Account

HSBC accounts are good for international students, especially if you’re an existing HSBC customer who will be coming to the UK to study. The bank can get your account up and running before you arrive in the UK (visit the International Banking Centre in your home country to do this).

Furthermore, they provide an automatic overdraft of at least £500 free of overdraft interest at account opening. If you need more, the maximum overdraft available is £3,000 interest free.

Natwest: Student Current Account

Take the national express coach often? You might want to consider the Natwest student current account then, because it comes with a free 4-year national express coach card!

In terms of overdraft, you can apply for one up to £500. After the first term of your first year, you can apply for an overdraft up to £2,000; this is interest free, no set up fee, and no hidden costs.

The Co-operative Bank: Student account

While they currently do not offer freebies, this student account also has attractive interest free and arrangement fee free overdrafts available! In your first year, you get £1,400 interest free. In your second year, you get £1,700 interest free and in your third year, you get up to £2,000 interest free!

Halifax: Student Current Account

Planned overdrafts of up to £3,000 are completely interest-free, and will stay interest-free for the length of your course, plus one year after you graduate, up to a maximum of six years.

Note that all these banks have more terms and conditions that are not specified in this short guide. Visit their website for more details or speak to someone at the bank before you decide on one! Choose the right bank from the start, so you do not have to go through the hassle of switching banks halfway through.

It’s also useful to note that the advertised student overdraft limit is often the maximum you can get, depending on your credit rating/status and account conduct. You also have to note when you have to repay your overdrafts. Some bank charges for late repayments can take a nasty hit to your pocket if you’re not careful! Lastly, remember that most banks have charges for unplanned/unarranged overdrafts, so make sure you do not exceed your overdraft limit!

What’s an overdraft?

It’s a short term borrowing facility that allows you to borrow money through your bank account.

What’s a planned/arranged overdraft?

An agreement between yourself and your bank that states the amount of money you may borrow. For example, if you applied for a planned overdraft of £300 but you only have £50 in your bank account, the planned overdraft would allow you to make a payment of up to £350. An unarranged overdraft is an overdraft that the bank has not agreed to, so be careful because charges may apply if you spend more than what’s in your account.

There are more accounts to choose from than those listed in this blog, so make sure you shop around and find out all the information you need from a local branch before you make a decision!

Jasmine Teo lives at Liberty House in London. She is currently studying a Master’s degree in Language and Cultural Diversity at Kings College London.





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