Best student bank accounts 2017
Student bank accounts are a great thing – they help with the financial burden of university and offer unique interest rates available only to students. But they can also be a burden, confusing, hassling and overwhelming. Students should always live within their means and financial positions differ from person to person. So consider your budget and choose an appropriate account for your needs.
The 2015 student money survey revealed that 80% of students feel financially unstable and face constant worry about making ends meet. With the cost of student lifestyles on the rise and an average rent payment of £373 per month at university, it is easy to see why.
Want a student bank account but don’t know where to start? We’re here to help! For most people, university is the first time they are independently financially responsible and they want to be informed.
So – what exactly is an overdraft?
It is a borrowing facility allowing students to borrow money short-term through their bank account. Between the student and the bank, an agreement is made stating the amount of money available to be borrowed. The best thing is that student bank accounts offer a rare benefit – 0% interest on all borrowed money. Although this advantage doesn’t last forever, it offers a nest of financial support throughout university.
A recent survey shows that two-thirds of students have some kind of overdraft facility. So we’ve made a list of five of the most popular ones out there for 2017.
HSBC Student Account
Students using the HSBC student account are given an immediate overdraft of £500, with the possibility of increasing it to £1,500 within the first year. The full amount available is £3,000, although this depends upon personal credit scores. Although HSBC no longer offers the old incentive of a £60 Amazon voucher, it does provide a year-long membership to Amazon Student Prime.
The best feature of this account is that HSBC won’t allow you to go beyond the pre-arranged 0% overdraft – so no unexpected interest fees.
Co-operative Student Account
The Co-operative student account depends upon a £300 deposit and continued income every term. Although a restriction, most students can easily fulfil this requirement through their maintenance loan. The benefit is an overdraft of up to £3,000 – interest-free. Unfortunately, Co-op doesn’t offer any incentives, but most students do receive the full amount when they request it.
Nationwide FlexStudent Account
Nationwide doesn’t offer incentives, but it does offer large overdraft limits. Students can get up to £3,000 depending on their credit rating and financial management. Going for a large interest free overdraft is a good idea, and this bank won’t distract you with misleading freebies. You know what you get with this FlexStudent Account.
Santander 123 Student Account
Many students receive the full £1,500 limit with Santander’s 123 student account. The deal depends on you receiving £500 per term, which usually comes from a student maintenance loan. Initially, there is a 0% interest limit of £250 and this quickly increases to £1,500 within the first year. It also has a great incentive: a 16-25 young person railcard lasting 4 years and worth about £100.
Santander has always been a popular bank for students. A 2015 survey showed 23% of students banked there and gave a high level of customer satisfaction, at 6.65 out of 10. In 2016, it also won the best student satisfaction award.
Popular for a reason, the Santander 123 account is simple, fair and definitely worth consideration.
Halifax Student Account
With £1,000 guaranteed from the beginning, the Halifax student current account is another attractive choice. To increase the overdraft, the bank reviews each student’s credit history individually but if you are financially responsible, the reward is an interest-free £3,000 limit.
Again, no freebies with Halifax but it’s a good choice for those wanting stricter rules on their spending habits.
Make a budget!
One benefit of all student bank accounts is they reduce the likelihood of using payday loan sites such as Wonga, QuickQuid, CashLady or Wizzcash. Student bank accounts are mutually beneficial when used responsibly, whereas loan websites are one-sided and likely to take advantage of those facing financial struggles.
It is always better to adjust your budget than borrow from loan sites; the astronomical interest rates are never worth the risk.
The dangers of these sites reveal the importance of budgeting. Luckily, there are numerous sources offering financial advice and support, with the site offering a simple guide to budgeting for beginners.
If you’re organised with money from the start, debts won’t creep up on you after graduation. So, enjoy your university experience and take control of your finances by finding the perfect student bank account for you!