Student bank accounts are specifically designed for full-time students in further education over the age of 18. Some banks do offer such accounts to students aged 17, but you wouldn’t be offered an overdraft or credit card. You must also be a UK resident (most banks offer alternative accounts for international students) and your course must either be at least two years in duration, or one year if it leads to a degree.
Competition in the UK student bank account market is intense, with all major banks vying for new customers, in the hope that you will remain loyal after you’ve graduated. As such, student bank accounts are free to use and offer a wealth of goodies, freebies and discounts. Most offer one or more of the following benefits:
You can apply for a student account by filling out a simple online form or by visiting a bank branch. Many of the major banks offer the seven-day switch guarantee where you can move all your financial particulars from your main account to your student account seamlessly within seven working days. You will need to produce some form of ID to prove your identity and your address, and some form of documentation proving that you’re a student (or are guaranteed a place at a university/college). Such forms of ID can include:
It should be noted that only original documentation can be accepted, so if you’re applying online you will have to visit a branch to submit your documentation. Generally you do not need to make an appointment to do this.
Once you have proven you’re eligible for a student account, the bank will undertake a credit check using your details. Unless you’re a mature student, it’s likely that you won’t have much of a credit history – but if you have missed payments you were responsible for paying and your credit rating has suffered because of it, you may be refused a student bank account at this point. It is always better to check out your credit history using one of the credit reference agencies (Experian, Equifax or CallCredit) prior to applying for a student account, just so that you are aware of what the banks will see.
In order to keep your account open, and gain all the rewards it offers, many banks stipulate a minimum deposit amount per term (usually around £500) that must be paid into your account.
This differs from bank to bank. Some accounts will give you one year to repay what’s left of your overdraft; others will give you two or even three years. Some banks will offer a reducing tiered arrangement where the amount of your overdraft will be reduced each year, encouraging you to pay it off over time. It is important to consider how you will repay your overdraft well before you leave education, as it could be a costly form of borrowing if you are left to repay it at double digit interest rates.
With all the tempting goodies on offer, it is easy to be swayed towards one account over another, but it is important to think about how you will really spend your time (and money) as a student – so you can work out which benefits and rewards you will actually make use of. For example, there’s little point in applying for an account that offers an impressive interest rate on savings if you are unlikely to ever have any, or an account with a free railcard if you are rarely going to travel by train.
It is likely that as a student living on a student loan you will need an overdraft, so it makes sense to check out the overdraft rates on offer (and whether these are ‘guaranteed’ or ‘up to’). Once you have narrowed down a few accounts, check out the freebies, cashback deals and discounts on offer. Make sure that you will actually shop at the places with the discounts or cashback, so that you can fully maximise your gain and get the most out of your student account.
Now read our guide on choosing the right current account
Did you find this useful?
Last updated: 31 May, 2019
© 2019 Bankrate and its licensors. All rights reserved. Bankrate is a trading name of uSwitch Limited, registered in England and Wales (company number 03612689). uSwitch Limited is authorised and regulated by the Financial Conduct Authority under firm reference number 312850. You can check this on the Financial Services Register by visiting the FCA website: www.fca.org.uk/register. Our registered address is The Cooperage, 5 Copper Row, London, SE1 2LH.
Bankrate services are provided at no cost to you, but we may receive a commission from the companies to which we refer you.