Student bank accounts – the essentials

Student bank accounts – the essentials

Deciding which bank account to open as a student can be a tricky decision and is more essential than you may first realise. If you don’t plan on getting a job whilst at University then you may find yourself struggling to manage your finances; this is where your bank can be of great use to you.

All big name banks, and even some of the lesser known ones, offer what is known as a student account. A student account, as you can guess, is tailored specifically for individuals who will be studying and hence may not have much money. One of the key differences of a student account is that it will enable you to have an overdraft usually of £1,000+ (depending on the bank).  Sounds great right? We can already see the pound symbol in your eyes.

Overdraft An overdraft is the amount of money you are allowed to borrow from your bank. This is usually only used in emergency situations however can be essential for a student. Do bear in mind this money will have to be repaid.

However student bank accounts are not for everyone. The first thing you must do is determine whether you feel you need a student account.  Below we have compiled a list of the advantages and disadvantages to help you make an informed decision.

Advantages Disadvantages
  • Being a student you will often find yourself with not much money yet still needing to pay bills as well as have money for food, etc. Having a student account will allow you access to an overdraft, essential for those times when you have no money!
  • Even if you find yourself a job at University and are good at managing your finances you might find having a student account is a great safety net and will provide you with a bit of reassurance
  • Now having an overdraft may seem like a luxury however it can easily mount up if you don’t keep an eye on it.
  • Technically the money you are borrowing in your overdraft is not yours so you will have to pay it back eventually. If you constantly are in your overdraft you may find it difficult to work yourself out, especially after graduating.

If you have decided that a student account is something you feel you need the next task you must do is a set your priorities and decide what is essential from your student account.  Many of the bigger banks today are competing against each other and as such are offering a variety of benefits. For example, Santander offer a free 4 year railcard to students who open an account with them, which would be a huge bonus if you were choosing to live away from home but not so much if you were living at home. We recommend that you do your research on as many banks as possible prior to opening an account so that you can see what benefit best suits you; this may actually mean that you end up leaving your current bank account.