Before you choose a student bank account, check all charges e.g. overdraft charges.
Most students decide where to bank while at university based on what incentives are on offer, or based on the size of the fee-free overdraft. While that’s better than basing your decision on who you’ve banked with all your life – because the first rule of personal finance is that loyalty rarely pays – there is one other crucial thing to factor in: what happens if you go over your overdraft?
If you accidentally spend more than the amount arranged with your bank, which is easily done, financial penalties may be incurred. We’ve looked at the fees charged by eight banks offering student accounts, and found that only three of them won’t charge students for this. See the table below or click here if you’re using a tablet or your phone.
| Student Bank Account | 0% Overdraft Terms | Unarranged Overdraft Terms | Incentive | Source |
| Student 123 Current Account | Year 1-3: £1,500 Year 4: £1,800 Year 5: £2,000 |
£5 per day, capped at 10 days in each monthly statement £5 fee for allowing a payment despite funds, £10 for refusing a payment despite lack of funds |
4 year railcard + Monthly interest of 3% AER/2.96% gross (variable) on balances from £300 up to a maximum of £2,000 1|2|3 world offers and 15% off certain retailers |
Source |
| HSBC Student Account |
Year 1: £1,000 |
Unarranged overdraft fees are ‘not applicable’ to students accounts. |
First year students get £100 when opening account. 12 months British Cycling Fan Membership A series of student discounts on restaurants, shops and cinema vouchers
|
Source 1
|
| Natwest Student Account |
May apply for a £500 overdraft in first term and up to £2,000 any time after the first term. Must deposit £750 every 3 months. |
Charges students for unpaid transaction fees: £8 1 fee per charging period. |
Choice between: 1yr Amazon Prime Student & £10 Amazon Gift Card National Express Coachcard (1/3 off fares), valid for 4 yrs TasteCard (2for1 or 50% off in participating restaurants), valid for 4 yrs |
|
| Nationwide FlexStudent | Year 1: Up to £1,000 Year 2: Up to £2,000 Year 3: Up to £3,000All on request Must pay in £500 per term and show “good account behaviour” |
There are no fees: “The UK’s only fee-free account” |
Receive 1% AER/gross p.a. (variable) on balances up to £1,000. |
Source 1
|
| Barclays Student Additions | Account opening: up to £500 Year 1: up to £1,000 Year 2: up to £2,000 Year 3 and beyond: up to £3,000Subject to application, status and lending criteria. |
No fee for allowing a payment despite lack of funds
£8 a day unpaid transaction fee capped at £32 per month (4 charges per month) Will charge £5 per day, 7 charges a month, for emergency borrowing fees within arranged overdraft. |
Selected cashback offers with participating retailers | |
| RBS Student Current Account | May apply for a £500 overdraft in first term and up to £2,000 any time after the first term.
Must deposit £750 every 3 months |
Charges students for unpaid transaction fees: £8
1 fee per charging period. |
Choice between:
1yr Amazon Prime Student & £10 Amazon Gift Card National Express Coachcard (1/3 off fares), valid for 4 yrs TasteCard (2for1 or 50% off in participating restaurants), valid for 4 yrs |
|
| Lloyds Student Account |
In your first year, you can apply for a planned overdraft where there is an interest and fee-free amount of up to: £500 for the first 6 months from account opening, £1,000 from month 7 from account opening, £1,500 from month 10 from account opening. In your second and third year, your planned overdraft can be up to £1,500 In your fourth year and above, your planned overdraft can be up to £2,000 |
If a payment takes you over your limit or we refuse it, you won’t be charged.
The daily arranged overdraft fee is 1p for every full £6 you borrow up to £1,250, 1p for every further full £7 you borrow between £1,250 and £2,500, and then a further 1p for every full £8 you borrow over £2,500. |
TOTUM card. (Previously NUS extra).
Free ISIC card and discounts on 200 UK stores Up to 15% cashback with Everyday Offers at certain retailers. ‘It’s On Us’ bonus. Every month, we pay customers for something they’ve bought up to the value of £500 on their Lloyds Bank debit or credit card. Enter the ‘free draw’ to get access. |
|
| Halifax Student Current Account | A fee-free arranged overdraft up to £1,500 for the length of your course plus an extra year after you graduate, up to a maximum of 6 years. (Overdrafts are repayable on demand and subject to status) | No fees. “So all your payments are made, it’s important you manage your account within your planned overdraft limit. If you don’t have enough money in your account or you reach your limit, you may not be able to make any more payments. If a payment takes you over your limit or we stop it, you won’t be charged.
“This could mean your mortgage or rent and other commitments may not be paid. Some suppliers may charge you fees for missing those payments.” |
Credit interest on any credit balance 0.10% AER (0.10% gross) variable. Interest is paid monthly Cashback when you spend once registered for Online Banking and you’ve activated Cashback Extras Eligible account for Save the Change®.
|
Source 1
|
| TSB Student Account | Months 0-6: up to £510 Months 7-9: Up to £1,010 Thereafter: up to £1,510 Must apply to receive increase |
If you try to make a payment and you don’t have enough money in your account (including your Arranged Overdraft if you have one), we’ll treat this as a request for an Unarranged Overdraft. If it’s authorised and you use £10 or less, you won’t be charged fees or interest on the amount you’ve borrowed. If you use more than £10 you’ll get charged interest and fees on the full amount.
£6 monthly usage fee Interest on the whole amount. Returned Item Fee of £10 per Max £80per month for all fees |
Receive 5% AER /4.89% gross variable interest on balances up to £500, paid by the 10th working day of each month
|
Source 1
|
Source: Information collated from bank websites by HelloGrads.com, correct on 8th August 2019
Many students will have accounts with challenger banks like Monzo and Revolut, supported by mobile apps featuring handy functions for budgeting and splitting bills. However, these don’t offer fee-free overdrafts, even to students, so for those needing arranged overdrafts it’s worth using these alongside dedicated student current accounts.
