With A-Level results due to be published on 16th August many students and their parents will be trying to seek out the best bank account to help them manage their money whilst away at college.
For many cash strapped students the account offering the largest interest free overdraft will be the main priority as it will help keep costs down.
Most banks limit the amount they will lend interest free in year 1 which is a sensible move – with most allowing between £1,000 and £1,500, and be 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 of study and £3,000 in year 3 whereas TSB, Santander and Lloyds 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 more than £190 in 12 months.
Best overall student bank account
The Student Account from HSBC is the Moneycomms best buy this year as not only does it offer one of the best overdraft deals, but it also comes with an £80 Amazon Gift Card, 1 year free membership to Amazon Prime and a regular savings account (should you have any spare cash!) paying 3% on savings up to £3,000.
All the banks will look to woo you with freebies and offers but for many students a larger interest free overdraft limit will be the smarter financial move.
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 one years free Amazon prime, a £10 Amazon gift card, a Tastecard and a National Express Young Persons Coach card giving one third off fares.
Al full breakdown of all student bank accounts for 2018/19 is shown here Student Accounts 2018 19 02 Aug 2018