With A Level results announced last month, 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.
FULL LIST OF BANK ACCOUNTS – OVERDRAFT LIMITS and FREEBIES
Don’t underestimate the value of interest free borrowing
The big banks will be keen to win your custom – they see you as the high earner of tomorrow, so will use giveaways and cash bribes to entice you 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.
It’s certainly worth considering applying for a student bank account that comes with the largest interest free overdraft – some banks may only offer £1,500 or £2,000 at zero per cent but HSBC, and Nationwide are offering up to £3,000 and NatWest up to £3,250 (subject to application).
You may not need to use all the overdraft to start with, but if things change and you do, that extra £1,000 interest free will prove more beneficial than the freebies and add-ons typically offered to students – £1,000 interest free is worth an extra £350 – £390 per year savings on typical bank overdraft charges which are close to 40% in some cases.
More Financial Tips for Savvy Students
Try to avoid relying on expensive credit cards to fund your life at university
If you feel you must take out a credit card at Uni you should look to only use it for absolute emergencies.
Try not to be tempted to use it as an extension of your overdraft because unless you have the cash available to clear your balance in full, your measly budget will be squeezed further with most credit cards charging interest of just shy of 25% APR.
The banks will make it easy for you to apply for a card at the time you open your bank account (it’s their first chance to earn some interest back from you!), but they are best avoided until you have a regular income.
Even if you only borrow £500 on your plastic it will set you back around £125 a year in interest – hence another reason why you’re better off with the biggest interest free overdraft.
Draw up a budget – and try to stick to it
For some students it’ll be the first time they’ve been responsible for managing their own finances, so getting a good grip on your budget is essential – the last thing you want is money worries putting you off your studies.
Keep a regular eye on your bank balance via mobile or online – contactless debit cards may be quick and easy to use but you can easily lose track of what you’ve spent. If it helps operate on a cash only basis – withdraw a set amount out of the ATM to last you the week – it’s a bit drastic but a good way to prevent overspending.
You may be eligible for Council Tax exemption
For households where everyone’s a full-time student you don’t have to pay Council Tax. If you do get a bill, you can apply for an exemption – full details here.
To count as a full-time student, your course must last at least 1 year and involve at least 21 hours study per week.
Don’t pay more tax than you need to
If you take part time work to help supplement your finances, remember the first £12,570 you earn is tax free (2025/26 tax year). If you find your employer deducts tax from your pay you can reclaim it from the HMRC website
Take advantage of cheap student software offers
Many students are eligible for free software and discounts from Microsoft – you can get Office 365 Education for free and discounts on windows laptops
Be food smart
If you’re sharing accommodation, then buying food between you and cooking at home will end up being far cheaper than a night out at a local restaurant – you might even improve your cooking skills into the bargain!
Keeping the cost of books to a minimum
Try buying your textbooks second hand on eBay, borrow from the university library – alternatively check out e-Textbooks from vitalsource.com – anything to help keep your costs in check.
