Student bank accounts
Entering higher education is an exciting milestone in a young person’s life, but it often comes with new financial responsibilities. To help students manage their finances during this period, banks offer student bank accounts. In this article, we’ll explore what student bank accounts are, their key features, and how to open one.
- Student bank accounts: designed for those in higher education, offering key features like interest-free overdrafts and student perks.
- Manage your finances: most accounts provide tiered overdraft limits that grow with each year of study.
- Perks and freebies: from railcards to cash, banks compete to attract students with enticing offers.
- Graduate accounts: a post-education option, allowing time to repay debts before interest kicks in.
What is a student bank account?
It’s simple, really. Student accounts are bank accounts for people in higher education. You can usually open one when you have your A-level or Scottish Highers results and a place at university confirmed.
Can I have an overdraft on a student bank account?
Most student bank accounts come with an interest-free overdraft facility. This allows students to borrow money from the bank up to a predetermined limit. While debt is never a good thing, a lot of students are likely to require credit, and an overdraft can be a useful buffer. Some student bank accounts offer tiered overdraft amounts, which increase with each year of study, so the maximum allowance may not be available until your second or third year.
Other benefits of a student bank account
Banks often offer freebies or perks to convince students to sign up with them. These include free railcards, subscriptions, and sometimes cash.
How to open a student bank account
If you want to open a student account, you’ll need proof of address and identity. This could be your passport, birth certificate or driving licence. On top of that, you’ll need proof of your status as a student, which could be your UCAS code or offer letter.
If you want your student account to be ready for when you start your course, it might be worth getting all the documents you need together in advance.
What are the best student bank accounts?
Student accounts with the biggest overdraft amount can help students manage their finances, allowing them to go into debt without a financial penalty. However, the quoted overdraft limit is not necessarily what you will get. While perks are nice, the interest-free overdraft is more important.
Some banks allow you to switch accounts during your course, so if you realise that your current provider doesn’t offer the overdraft you need, you can shop around and find one more suitable for you.
What’s the difference between a student and graduate bank account?
Graduate accounts are specifically aimed at people who’ve just graduated from university. Unlike a student account, which allows you to borrow in order to get through your higher education, a graduate account provides you with a grace period of a few years to repay your debts before accruing interest. Graduate accounts often offer similar perks.