The Advantages and Disadvantages of having a Student Bank Account

Last updated: 11th May, 2012

Advantages-and-Disadvantages-of-a-student-accountThis post is here to let you know a little bit about the advantages and disadvantages of having a student bank account. There are plenty of pros and cons listed on the homepage but this post is just here to break it down to a simple form.

Did you know that you do not have to have a student account when starting university? Some students choose to stick with a standard current account because they find that it will benefit them more. Of course it all depends on your personal situation (although we would recommend a student account for the majority).

To make the decision even easier once again we have listed the advantages and disadvantages to the best student bank accounts 2012 that you need to take into consideration when applying.

The benefits of a student account

There are only a few advantages to a student account over a current account but it’s worth keeping in mind that they are pretty important:

  • Interest free overdraft facilities: A student account offers each university student a specified overdraft amount at an interest of 0% with some accounts offering up to £3,000 during 3 years of study. This overdraft acts as a great buffer for any student
  • Freebies:  student freebies such as a rail card or laptop insurance can be a real help during your time at university
  • Free set up: Some current accounts charge for a set up or simply for each month
  • Low deposits required: Student accounts only require you to make sure that your maintenance loan is deposited. Some current accounts require large deposits every month.

The disadvantages of a student bank account

Student accounts are not always best for everyone and there are a few disadvantages involved with setting one up:

  • Low interest on positive balances: Compared to most current accounts, student accounts don’t actually allow you to make interest on your bank account balance
  • Interest free overdraft: This may sound odd as it is also listed as an advantage but and interest free overdraft can sometimes be too tempting. Many students see it as free money as opposed to a safety net and this can be dangerous.

So there you have it. There are a number of other issue involved to do with transfers abroad and charges for late payments but these also apply and differ largely when applying for a current account.

Hopefully, this guide on the advantages and disadvantages of a student bank account will help you in order to make the right decision based on your personal circumstances. stress that the overdraft is tempting but it can also be a danger.

By students

Hello! This website has been written by student money experts Save the Student! to give you an overview of student bank accounts and what they have to offer you.

The studentsWe review the benefits and catches of all student accounts so you can make an informed choice and avoid the traps!

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