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Rhiannon Philps

Content Writer
Published: 23/07/2024
a piggybank wearing a graduation hat with coins stacked next to it

From interest-free overdrafts to exclusive discounts and vouchers on rail travel, food and more, student current accounts can offer a range of perks.

 

Whether you’re a fresher about to start university in September or in the middle of your studies wanting to take advantage of the latest student current account deals, there are a number of accounts to choose from.

Many of the major high street banks offer a range of perks alongside their student current accounts, and the experts at Moneyfactscompare.co.uk have analysed the latest deals.

“Money management is a key life skill and for some students this will be the first time they have been away from home, which can be daunting,” Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, noted.

“However, there are various ways for students to keep on top of their finances, such as with online or mobile banking and by using budgeting apps. It’s also worthwhile for them to look into other ways to save some cash, such as with student discount offers and cashback when they spend,” she continued.

What is a student bank account?

A student bank account is simply a current account that is only available to those studying at university. You usually need to show confirmation of your place at a university, alongside the usual identity checks, to open an account.

These specialist accounts usually offer extra perks not available on standard current accounts.

Below we highlight some of the top student bank account deals and perks available this academic year.

Interest-free overdrafts

An interest-free overdraft is one of the most popular features of a student bank account as it provides a financial buffer and can help students manage their costs.

Most student current accounts come with an interest-free overdraft, with many providers offering up to £1,000 for first-year students and increasing this in subsequent years.

NatWest and Royal Bank of Scotland both offer an interest-free overdraft of up to £2,000 in the first two years of study (up to £500 in the first four months), and students can increase this to up to £3,250 in years three to five.

This is the longest interest-free overdraft on offer, although HSBC and Nationwide BS come close by offering up to £3,000 in year three.

As well as an attractive interest-free overdraft, NatWest and RBS also offer students £100 cash and a tastecard that provides 50% off food or two for one meals at selected restaurants for four years, in addition to offers on leisure and entertainment.

While a generous interest-free overdraft can be appealing for students, it’s important to bear in mind that an overdraft is a debt that they will eventually need to repay. As a result, students should only dip into their overdraft when necessary.

Providers may extend the interest-free overdraft period for a limited period after graduation, but students should clear their overdraft before interest charges apply otherwise they could end up in a cycle of expensive debt. See more on how overdrafts work.

Last updated: 23/07/2024

  • NatWest

    Account Name: Student

    Overdraft Rate (EAR): N/A

    Interest Rate (AER): 0.00%

    Account Fee: N/A

    Perks: £100 cash, four-year tastecard subscription, interest-free overdraft of up to £2,000 in year one to two.

    Representative example: N/A

  • Royal Bank of Scotland

    Account Name: Student

    Overdraft Rate (EAR): N/A

    Interest Rate (AER): 0.00%

    Account Fee: N/A

    Perks: £100 cash, four-year tastecard subscription, interest-free student overdraft of up to £2,000 in year one to two.

    Representative example: N/A

Discounted rail travel

Students who regularly use the train may be interested in Santander’s Edge Student Current Account as this comes with a free 16-25 railcard. This card offers one-third off rail travel and is valid for four years, so regular train users could save a significant amount of money by using it.

Santander also offers an interest-free overdraft of up to £1,500 for students on a three-year course (as long as they pay in at least £500 to their account each term) alongside a range of other deals, including cashback, vouchers and prize draws through its Santander Boosts scheme.

As an extra perk, students who open a Santander Edge Student Current Account between 15 July and 30 September 2024 and pay in a minimum of £500 will also be entered into a prize draw where they could win a prize of either £27,750 or £9,250.

Last updated: 23/07/2024

  • Santander

    Account Name: Santander Edge Student Current Account

    Overdraft Rate (EAR): N/A

    Interest Rate (AER): 0.00%

    Account Fee: N/A

    Perks: Four-year 16-25 railcard, interest-free student overdraft of up to £2,000, exclusive offers via Santander Boosts, entry into a prize draw.

    Representative example: N/A

Earn 5.00% AER on up to £500

Students looking to maximise the money in their current account could consider TSB’s student account that pays 5.00% AER on balances up to £500. This is competitive when compared to the top variable savings rates, but it may still be worth opening a savings account alongside the current account to start to build up a savings pot.

TSB also offers 25% discount on breakdown cover with The AA and other exclusive offers with its student account.

Last updated: 23/07/2024

  • TSB

    Account Name: Student

    Overdraft Rate (EAR): 39.90%

    Interest Rate (AER): 0.00%

    Account Fee: N/A

    Perks: Earn 5.00% AER on credit balances up to £500, interest-free student overdraft of up to £1,500, 25% off The AA breakdown cover.

    Representative example: Based on an overdraft limit of £1,200 charged at 39.90% EAR Variable. Representative 0.0% APR variable.

Fee-free spending abroad

Students who are studying a foreign language at university or planning some trips abroad during the holidays may be interested in the FlexStudent bank account from Nationwide BS which doesn’t charge any fees to use its debit card abroad.

Additionally, students can receive £100 in cash and £10 of Just Eat vouchers per month for 12 months, which can ensure they eat more than cereal and instant noodles in their first year! They need to pay in at least £500 before 13 December 2024 to receive these perks.

Last updated: 23/07/2024

  • Nationwide BS

    Account Name: FlexStudent

    Overdraft Rate (EAR): N/A

    Interest Rate (AER): 0.00%

    Account Fee: N/A

    Perks: No foreign usage fees, interest-free overdraft up to £3,000, £100 cash, £120 in Just Eat vouchers.

    Representative example: N/A

Cashback offers

Elsewhere, Halifax and Lloyds Bank offer up to 15% cashback at selected retailers with their student current accounts, alongside an interest-free overdraft up to £1,500 (Halifax) and £2,000 (Lloyds Bank).

Any students not in their overdraft can earn interest on their money as Halifax pays 0.50% AER on any balance while Lloyds Bank pays 2.00% AER on balances between £1 and £5,000.

However, if students are fortunate enough to have a significant sum in their current account, it may be worth moving this money to a higher-paying savings account.

Last updated: 23/07/2024

  • Halifax

    Account Name: Student

    Overdraft Rate (EAR): 39.90%

    Interest Rate (AER): 0.50%

    Account Fee: N/A

    Perks: Interest-free overdraft up to £1,500, up to 15% cashback at selected retailers, earn 0.50% AER on credit balances.

    Representative example: Based on an overdraft limit of £1,200 charged at 39.90% EAR Variable. Representative 0.0% APR variable.

  • Lloyds Bank

    Account Name: Student

    Overdraft Rate (EAR): 39.90%

    Interest Rate (AER): 2.00%

    Account Fee: N/A

    Perks: Interest-free overdraft up to £2,000, up to 15% cashback at selected retailers, earn 2.00% AER on credit balances up to £5,000.

    Representative example: Based on an overdraft limit of £1,200 charged at 39.90% EAR Variable. Representative 0.0% APR variable.

Compare student bank accounts

To compare the student current accounts listed above with others available on the market, see our student bank account chart.

Disclaimer

Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfactscompare.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.

Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.