Choosing the most suitable student bank account
When you’re a student the big banks are all keen to win your custom – you are seen as the high earner of tomorrow so they’ll try to entice you with all sorts of goodies to sign up for their student bank account.
However for most students being able to borrow as much as possible interest free will prove to be the biggest financial benefit.
The PDF table below shows details of overdraft costs, credit card availability and student incentives on offer for the coming year.
Lloyds, NatWest and Santander all offer a maximum of £2,000 interest free overdraft whereas Barclays, Halifax, Nationwide Building Society (Year 3) and HSBC are most generous in this area with up to a £3,000 free limit (subject to application).
You are not guaranteed the interest free maximum with any of the banks as you have to apply for the overdraft, however it’s a sobering thought that the extra £1,000 interest free from HSBC or Halifax would end up costing you £154 per year with Lloyds Bank (at 8.21% EAR plus £6 monthly fee) – a difference of more than £460 during a three year stint at university.
The only freebie that may be worth a closer look is the free 4 year 16-25 railcard from Santander which could save you plenty on your train fares, particularly if that’s your chosen mode of transport between home and university.