With A Level results due to be announced on 17th August, many students will be busy making their accommodation and travel arrangements, ready for their Autumn start at University.
Another item high on the Uni to-do list is sorting out a Student bank Account, so here’s a run down of what the banks are offering this year.
Student Banking 2023
|
Maximum interest free overdraft limit £ |
Credit Interest | ||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
Santander
123 Student | £1,500
(Must pay in min of £500every 4 months) | £1,500 | £1,500 | £1,800 | £2,000 | Nil
|
Incentives
| ||||||
Halifax | £1,500 | £1,500 | £1,500 | £1,500 | £1,500 | 0.50% Gross |
Incentives
| ||||||
NatWest/RBS
| £2,000
(Tiered – 500 first term up to £2,000 second term onwards) | £2,000 | £3,250 | £3,250 | £3,250 | Nil
|
Incentive
£100 cash plus 4-year free Taste card (worth £160) | ||||||
HSBC
| £1,000 | £2,000 | £3,000 | £3,000 | £3,000 | Nil |
Incentives
| ||||||
Lloyds Bank | £1,500
(Tiered £500 1st 6 months then £1k months 7 to 9). | £1,500 | £1,500 | £2,000 | £2,000
And year 6 | 2.00% Gross |
Incentives
| ||||||
Nationwide Building Society
FlexStudent (Must pay in at least £500 per term) | £1,000 | £2,000 | £3,000 | £3,000 | £3,000 | Nil |
Incentive
| ||||||
TSB | Months 1-6 up to £500, months 7-9 up to £1000, month 10 onwards up to £1500 | £1500 | £1500 | £1500 | £1500 and year 6 | 5% AER/4.89% gross variable interest on balances up to £500 |
Incentives
| ||||||
Barclays Student additions
| £500 at opening and
Max £1,000 in year 1 | £1,500
| £1,500
| £1,500
| £1,500 | Nil |
Incentives
|
Andrew Hagger, Personal Finance Expert for Moneycomms recommends:
Choose a student bank account with the biggest 0% agreed overdraft limit
Seriously consider a student bank account that comes with the largest interest free overdraft – some banks may only offer £1,500 or £2,000 but HSBC and Nationwide are both offering up to £3,000 from year 3 and NatWest up to £3,250 (subject to application)
That extra £1,000 per year interest free will be far more financially rewarding than the standard freebies typically offered to students.
Be aware that interest free overdraft limits advertised are the maximum that are available – often the bank will say ‘up to’ £X so it’s not guaranteed you’ll get the full amount.
Avoid taking out a credit card if possible
Your bank will be keen to offer you a credit card when you sign up for your bank account but think twice before signing on that dotted line.
Yes, a credit card can give you some extra flexibility, but unless you are able to clear your balance in full each month, you’ll get stung by interest charges of around 20% APR and those additional costs will only put pressure on an already stretched student budget.