In the coming weeks, many young people will be starting a long-term relationship, but it’s not of a romantic nature—it’s with their student bank account. As students head off to university, banks and building societies are eager to attract them with enticing offers, such as attractive perks and generous overdraft limits, in hopes of retaining them as customers beyond their academic years.
While it’s not mandatory to open a student bank account—standard current accounts are also an option—student accounts provide unique benefits tailored specifically for university life.
Here’s a summary of the key perks and interest-free overdraft options from major banks.
- Perks: £100 cash and a free tastecard (valued at £55 per year, although current membership costs £29.99).
- Interest-Free Overdraft: Up to £2,000 from the first year (limited to £500 in the first term), increasing to £3,250 from the third year.
- Note: This offer is considered the most generous interest-free overdraft deal available.
Santander
- Perks: Free four-year 16-25 railcard (worth £100) providing up to a third off most rail fares. Prize draw for new customers with chances to win £27,750 or £9,250.
- Interest-Free Overdraft: £1,500 guaranteed for the first three years, increasing to £1,800 in year four and up to £2,000 in year five.
- Note: Santander was previously the most popular choice among students.
Nationwide
- Perks: £100 cash and £120 worth of Just Eat vouchers, distributed as £10 a month over the first year.
- Interest-Free Overdraft: Up to £1,000 in the first year, £2,000 in the second year, and £3,000 in the third year and beyond.
- Note: Nationwide is a mutual organization and donates 1% of its profits to charity.
Lloyds Bank
- Perks: £110 cash and a 20% discount on selected student union events at 29 universities.
- Interest-Free Overdraft: Up to £1,500 in the first three years (rising to £2,000 in years four to six).
- Note: Students can earn 2% interest on balances between £1 and £5,000 and up to 15% cashback at various retailers.
HSBC
- Perks: £125 for existing customers who switch to a student account.
- Interest-Free Overdraft: Up to £1,000 initially, with potential increases to £2,000 in year two and £3,000 in year three.
- Note: Offers the home&Away scheme with discounts on shopping, dining, and travel.
Barclays
- Perks: Free three-year subscription to Perlego, an online library service.
- Interest-Free Overdraft: Up to £1,000 in the first year (limited to £500 in the first term), increasing to £1,500 in the second year and beyond.
Halifax
- Perks: £110 cash.
- Interest-Free Overdraft: Up to £1,500 throughout the course and up to three years after graduation.
- Note: Earn 0.5% interest on positive balances and up to 15% cashback with Cashback Extras.
Bank of Scotland
- Perks: £110 cash.
- Interest-Free Overdraft: Up to £1,500 in the first three years (rising to £2,000 in years four to six).
TSB
- Perks: Various discounts, including 35% off a monthly gym pass and 25% off AA breakdown cover.
- Interest-Free Overdraft: £500 in the first six months, rising to £1,000 in months seven to nine, and up to £1,500 from month 10.
Monzo
- Perks: No dedicated student account, but popular among students for its budgeting features.
- Interest-Free Overdraft: Not available; standard overdrafts with rates up to 39% EAR and limits up to £2,000.
Choosing a student bank account involves balancing the attractiveness of the perks with the value of the interest-free overdraft. Some students prioritize financial incentives, while others may choose based on ethical considerations or specific needs, such as travel discounts.