Best Student Bank Accounts 2012/13
PLEASE NOTE: This site currently compares student current accounts for 2011/12. To keep updated with new changes (expected early Summer 2012), please Join our Free Newsletter.
The best student bank accounts are chosen each year based on the criteria in the bank account comparison table below (see it now).
This page will help to give you an overview of student bank accounts and what they have to offer. It contains insights from top student money experts and will help you make an informed decision when choosing your student bank account.
Incentives will always be there to tempt you but it’s time to be financially savvy and look at the bigger picture. You don’t want to leave university with even more debt than you already will be through your student loan. Choosing the best student bank account can really save you money in the long run so it’s best to shop around, or just follow the advice below!
Student Bank Account Incentives aren’t the real deal
The first thing to realise is that incentives, freebies and so on are just there as a distraction. As alluring as the ‘benefits’ sound, they should not be the main reason for choosing a student bank account. It may be true that a number of student bank accounts offer freebies but many of them can turn out to be worthless. For example, a USB stick is not really a great freebie and the bank can make up the cost in bank charges in the future.
You can easily accumulate in excess of £26 worth of overdraft charges if you haven’t chosen the best student bank account. Banks know that many students are young, perhaps slightly naive and so use this to their advantage; offering a railcard or discount on mobile phone insurance is an easy sell to many. What you should be looking at is the maximum student overdraft…
How important is a big student bank overdraft?
The student bank account with the largest overdraft should be one of the biggest draws. In other words, you want to choose the bank account with the biggest 0% borrowing for the longest period. This is particularly important if you go beyond your 0% overdraft as you will incur hefty bank charges, which obviously is something every student wants to avoid.
The Halifax student bank accounts offer one of the best deals on the market at the moment with a whopping £3,000 overdraft for up to five years. This is available from year one if you request it and is agreed.
Owen Burek of Save the Student! suggests: “If in your first year of university you feel you’ll need to borrow up to £1,500 as an interest-free overdraft, then Halifax’s student bank account is your best choice this year. Students also have the potential to raise this over the following years, however you should only spend what you are happy to pay back upon graduating.”
If you’re worrying particularly about money then this will be an advantage to many students. It is interest free until you graduate after all.
But… although it is possible to get a £3,000 overdraft, this amount isn’t guaranteed. Unless you have a great credit rating (which most students don’t) you probably won’t get this upper limit. You are given £500 automatically when you open your bank account and then have to apply for increases, which you will get depending on your circumstances.
For some students the thought of having £3,000 in their bank account in their first year of university can seem daunting. If you are lucky enough to be given the maximum straight away when opening a your bank account, then you still have to make it last for a full five years. If you’re not the best at managing your money this may be worth thinking about – you will have to pay it all back.
“Although interest free, £3,000 is a huge amount which you will have to pay back at some point. Whilst having a big student overdraft can be a real help for many, a smaller, staggered overdraft may be more suitable for students who are worried about overspending. To get the best student bank account in 2012, students need to look at a wide range of factors rather than just the overdraft,” explains Jake Butler of Save the Student!
The Best Student Bank Accounts for 2012
Coming soon for 2012. See below for this year’s best student accounts.
Make sure you check out our student bank account comparison table so that you can make a decision based on all of the available accounts.
1. Co-op
The Co-op student bank account is one of the best this year because of the guaranteed overdraft and helpful customer service.
You will get a 0% overdraft of £2,000 in the 3rd year, £1,700 in the second and £1,400 in the first. To guarantee your maximum overdraft limit you may need to have a good credit rating and you must deposit £300 when you open the account (which will just be your student maintenance loan).
Check out what Co-op have to offer and see why they are were our best student bank account for 2011 at their website.
2. Halifax / HBOS
Halifax had rose from 3rd to 2nd in our rankings last year, but it’s student current account still offers the highest overdraft, up to £3,000 interest free, available from year one. Although in your first year you are unlikely to top £1,000. When you apply you automatically get a £500 overdraft, so you may need to ask for more when you need it. The actual amount you get will depend upon your credit rating (check yours for free). You have one year after graduating to repay before interest starts being added. Don’t forget!
They also offered a low interest rate of 7.2% on agreed overdrafts beyond the 0% limit but be. Offers a 25% discount on AA breakdown cover. Also offered commission-free foreign currency and traveller’s cheques. Internet and telephone banking were also available with the Halifax student account.
3. Royal Bank of Scotland/NatWest
The Royal Bank of Scotland moved into third spot last year alongside it’s partner bank Natwest, offering an impressive £2,000 overdraft at 0%. Like the others, the overdraft limit is an ‘up to’, in your first year you should expect to get closer to £1,250 and then £1,500 in your third year dependent on your credit rating.
The Young Persons’ Railcard offer is only available to existing customers who own an adapt account. To find out if you are eligible it may be advised to call the bank. There are Natwest branches at 55 of the biggest universities in the UK as well as more student advisors than any other UK bank. Offers free text alerts about your account to your mobile. Internet, telephone and mobile banking.
They also have several other ‘special offers’ to seal the deal with freebie loving students.
Be aware that Natwest have also bought in new terms and conditions where you have to deposit £750 every 6 months and also make 3 debit transactions a month. Although your student loan will cover the £750, Natwest and RBS originally planned to do it every 3 months but crumbled under student pressure.
4. HSBC
The HSBC student bank account was pretty much the best of the rest. We put it in at number 4 last year and by all means you should check it out in comparison with the other student bank accounts 2012.
One positive is that you get 2% interest on any balance up to £1,000 in your first year at university. There is also a whopping overdraft limit of “up to” £3,000 of which only £500 is guaranteed unfortunately depending on your circumstances and credit history (which you can check here for free).
5. Lloyds TSB
They Lloyds TSB student bank account is great for students looking to take a 5 year course. The fact of that matter is that over the 3 years Lloyds TSB only offer an overdraft of £1,500 and the £2,000 0% overdraft is only available for students in their 5th year at university. Compared to other student accounts such as the Co-op and Halifax it simply doesn’t compete.
However, there are some great freebies on offer with the Lloyds TSB student account including a free NUS extra card worth £33 a year, LHA membership for 3 years and 40 free music downloads.
6. Santander
Santander offered a similar account to Lloyds, in that there is a £2,000 overdraft but it is only available in year 5. In the first year you could be looking to get a 0% overdraft up to £1,000 an overdraft of £1,250 in the second year and £1,500 in the third year.
There is also free insurance for mobiles, laptops and other gadgets on offer but be warned with Santander as students in the past have accused them of poor customer service. It will be interesting to see if they improve to become the best student bank account in 2012.
7. Barclays
The Barclays account was a good one to have for a certain type of student. If you can stick within your 0% overdraft limit of up to £2,000, dependent on your credit rating, then you will be fine. However, there are some extremely high charges for exceeding your limits.
They do offer discounts with Phones4u which you can check out on their website.
For a full list of rankings and to find out what is the best student bank account 2012 check out our updated student bank comparison table at the bottom of this page. This table offers extra information on the 8 major bank accounts offered to students and you can see which may suit you the most.
Student Bank Accounts
| Rank | Bank | Minimum Overdraft | Maximum Overdraft | Incentives & Freebies | Overdrawn Charge | Other Catches |
|---|---|---|---|---|---|---|
| 1 |  Co-Operative | £1400 | £2000 | None | 9.9% | Must deposit £300 when opening |
| 2 |  Halifax/HBOS | £500 | £3000 | None | 24.2% + £28 a month | The overdraft is not guaranteed. |
| 3 |  Natwest | £1000 | £1,500 | Free 5 year 'Young Persons' railcard for existing customers. | £6 a day. | Needs frequent use and deposits every 6 months. Must use online banking |
| 4 |  Royal Bank of Scotland | £1000 | £1,500 | Free 3 Year 'Young Persons' railcardfor existing customers. | £6 a day. | Needs frequent use and deposits every 6 months. |
| 5 |  HSBC | £500 | £3000 | 3% over bank base rate (~4%). | Difficult to achieve maximum overdraft amount | |
| 6 |  Lloyds TSB | £1500 | £2000 | 3 years free YHA membership. 40 free music downloads. Free NUS extra card. | 8.2% + £15 a month | Charge £5 a month to use interest-free overdraft. |
| 7 |  Santander | £1000 | £2000 | Free gadget (phone/laptop) insurance for 2 items. | £25 a month | Worst unauthorised overdraft bank charge. Must deposit £500 when opening. |
| 8 |  Barclays | £200 | £2000 | Exclusive deals with Phones4u. | £22 every 5 days until credited. | Can be hard to increase overdraft |
Making the final decision on student bank accounts
When it comes to choosing the best student account you should choose the bank that is best for you. A high overdraft is important but if you are not going to need a huge amount and worry you will waste it then opt for an account with other benefits.
It’s important to look at every aspect of the account before making your decision as you don’t want to be stung by high charges that you didn’t know existed. So whether it’s a large overdraft, railcard or the location of your nearest branch that is most important to you make sure you make the right decision for yourself. Explore the rest of the site for much more on student bank accounts and finance more broadly.
