Student Accounts

Student Accounts

This section explains what you should look out for when you compare student and university accounts and has an update of the best deals currently on offer for students.

A student account is a day to day current account designed specifically to cater for students. Students are usually defined by the bank as “a person in full time education at university or college”.

All student loans are now paid by an electronic fund transfer, so you need an account to get your funds from the government.

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Choosing a Student Account

In order to get the best bank account you must understand what you really need from your account.

What kind of spender are you?

Do you spend a small amount of money many times a day?

Do you manage your budget most of the time until you have a shopping spree?

Do you keep money under such tight control that you never spend?

Do you need a pre-installed overdraft?

How do you want to operate your bank account – face to face or over the internet?

Does your account link to other student packages? – ie: a student credit card or insurance?

How do you want to access your cash – at home or abroad? Check that you won’t be charged for using your cash-card, and withdrawing cash at all ATMs.

How close is the nearest bank branch? And what are its opening hours?

If you are going to do phone banking, will you have to call abroad for customer service, at your expense?

Most student accounts will try to entice you with a range of freebies ranging from iPods to train passes or hard cash. But don’t let the short term bribes persuade you – consider the account benefits. Students are very valuable to banks, as they want you to remain with them over your lifetime. Statistically you are more likely to get divorced than you are to change your bank.

Don’t simply choose a bank because of its presence at the Fresher’s fairs or because it’s close to your Halls of Residence. The banks which participate in fresher’s fair are likely to be there because they have paid the most for attending the fair – not because the university believe the bank to be the best. Sometimes the banks at the Fair have funded part of the campus – giving them even more of a monopoly over the student accounts.
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The Best Student Accounts

There are loads of alternative student accounts, make sure you choose the best one for you.

Its your money - invest it properly

HBOS

Max. Overdraft – £3000

Overdraft Charge – 0%

Agreed Additional Overdraft Charge – 7.2%

Unarranged Overdraft – 24.2%

Interest on in-credit balance – 2.02%

Royal Bank of Scotland

Max. Overdraft – £2750

Overdraft Charge – 0%

Agreed Additional Overdraft Charge – 0%

Unarranged Overdraft – 29.84%

Interest on in-credit balance – 2.02%

Other features – free 3 year railcard or £100 cash (Scottish students); discounts on laptop and mobile broadband (English/Welsh students)

Alliance Leicester Premier 21 (don’t need to be a student, but must be aged 16-20)

Max. Overdraft – £2500

Overdraft Charge – 0% (50p charge per day overdrawn – up to £5 a month)

Agreed Additional Overdraft Charge – 0% (50p charge per day overdrawn – up to a max. of £5 a month)

Unarranged Overdraft – £3 per day

Interest on in-credit balance – 10% (for balances up to £1000 for 1 year)

Other features – All statements online

Max. Overdraft – £1250

Overdraft Charge – 0%

Agreed Additional Overdraft Charge – 0%

Unarranged Overdraft – 17.81%

Interest on in-credit balance – 0.1%

Other features – free 5 year railcard; free webcam and discounts on laptop and mobile broadband

Things to remember

The maximum overdraft limit is not necessarily your overdraft. So double check what your actual limit is once you have opened the account.

If you don't have access to the maximum possible overdraft then the best idea is to have monies deposited in the account regularly. Even moving money through the account on a regular basis will aid your getting a larger overdraft.

If you can afford it, and you have an overdraft with a bank that you haven't made full use of, take the full overdraft amount and put it in a savings account ... and then do not touch the account until you are depositing.

If your intent is to make money out of these large overdrafts, then you should take the Halifax student account. If the overdraft is less than £3000 intially, try and have loans payments or other deposits put through this account first. After the deposits are in the account you can take them out and put them in an easy access savings account, or an express account. Take the overdraft amount out, and put this in a savings account also. While interest rates are not good for savers at the moment, one can still get a easy access savings account with 5% from ING.
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