Do I need a student bank account?

Moving away to university is a big step in many young adults' lives. With a long checklist of items to sort out before moving, a student bank account is often forgotten, especially if you already have a normal current account. If you’re not sure what a student bank account is or you’re wondering if it would suit your situation, then you’ve come to the right place. Here’s everything you need to know about student bank accounts.

What is a student bank account and is it right for me?

A student bank account is simply a current account designed to be used by people in higher education. It works the same way as a normal current account: you can pay money in, have your income or student loan paid into it, pay bills directly from the account and withdraw funds when you need them. Student accounts are different from normal current accounts though as they usually have additional perks that could be useful while you're away studying.

Do I have to have a student bank account?

Short answer: No. A student bank account isn't a necessity for every student. But it can come with many benefits that aren’t included with normal current accounts. The perks attached to a student account differ depending on the provider you choose, so do some research on what each bank offers before making your decision.

Can I get an overdraft with a student bank account?

Most student accounts offer interest-free overdrafts which last the duration of your time at university, with a grace period after graduation to give you a chance to pay it off before any interest is added on top. 

Moving away from home for the first time means you no longer have the safety net of living with your family, so careful budget planning is essential. Having an interest-free overdraft means you’ve got access to cash in an emergency. Not all providers will offer 0% interest, but the interest rate will almost always be lower than what’s offered with a standard account. Remember that the money in your overdraft isn't free and needs to be paid back, so an overdraft should only be used for emergencies or as a short-term solution.

It’s vital that you stay on top of your borrowing so you don’t graduate with large amounts left to repay with little income. Many banks that offer student current accounts have a dedicated team of student advisers, who are available to offer financial advice and support to the account holder. For students with little money management experience, this is a very beneficial perk over a standard current account, where this support isn't usually offered.

What other perks do I get with a student bank account?

Some banks offer extra perks such as free cash for meeting set criteria, like making a certain amount of payments from your student bank account or depositing a specified amount of money within a time period. Once the conditions have been met, money is simply deposited into your account in a few working days.

Other perks provided by a variety of banks are exclusive discounts or free gifts. Some banks offer a free discount card with every student account that works with a variety of high-street brands. Others offer free railcards for the duration of your education.

How do I choose the best student bank account?

It’s important to remember that although freebies are a great perk, you shouldn’t base your decision solely on these.

If a provider is offering a discount card or a railcard with their student accounts, but the overdraft has a higher interest rate, consider what is more beneficial for your personal situation. Perhaps you have little use for a railcard or rarely shop at the included providers of the discount card, but know you’d like the safety net that an overdraft offers.

Make a smart and informed decision about an account that will suitably see you through your years at university.

How do I open a student bank account?

Once you’ve looked into the student accounts offered by a range of providers and have selected the best deal for your circumstances, you can open your account.

The exact documentation required to set up a student account may differ slightly between banks. For most providers, you'll need the usual proof of identity (driving licence or passport) and proof of address (utility bill or bank statement). Alongside this, you’ll need confirmation of your university place. This can be proven through an acceptance letter from the institution, or by using your UCAS code. If you're opening your account before starting your course and have received a conditional offer from the university, you'll need to prove that you've received the required grades to meet the conditions.

Some banks offer an easy switch from a normal current account to a student one, so if you have an existing account with a bank and like their student account offer, contact the bank to switch your account. Confirmation of your university place will still be needed to make the change.

Setting up your student account quickly after receiving your university place confirmation means you access the benefits of the account before you start your studies.

As part of your research, always read student current account reviews to see what others are saying about the providers.