Choosing the best 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 and will help minimise costs.
Most banks restrict the amount they will lend interest free in year 1 which is sensible – with most allowing between £1,000 and £1,500.
Many students aren’t aware that you have to apply for any overdraft limit it’s not automatically set up on your account.
Barclays, Nationwide and HSBC all offer up to £2,000 interest free in year 2 and £3,000 in year 3 whereas TSB, Santander and Lloyds Bank only offer a maximum of £1,500 in year 3.
Having to pay interest on that extra £1,500 for TSB example would set you back interest of 8.21% plus a £6 usage fee each month so in the worst case scenario could cost you close to £200 in just 12 months.
If the free overdraft isn’t a priority for you then maybe look at Santander which offers a free 4 year 16-25 railcard or NatWest/RBS with a 4 year National Express Young Persons Coach card giving one third off fares.
The table below shows details of overdraft costs, credit card availability and student incentives on offer for the coming year.
- Best Cash ISA products for the new tax year – updated 6th April - April 7, 2020
- Barclays waives overdraft interest – how much will it save you? - March 26, 2020
- New Best Buy Fixed Rate Savings Bonds - March 24, 2020