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Choosing a Student Bank Account

Last updated: 7th June, 2012

Choosing a student bank accountBefore opening a student bank account it’s important to be aware of the motives and catches whilst choosing a bank to make sure that you get the best deal for you. It can be tricky to make the right decision and there is a lot to read through. It’s hard to know who to trust or where to turn for information on student bank accounts.

Here at studentbankaccounts.co.uk we wanted to make choosing a bank really simple. This is why we have a comparison table as well as facts and figures along with a review of each student bank account on offer.

This page is all about making sure that you know what to look for before you choose your account. That is why we have come up with 10 simple rules to help you when opening a student bank account.

10 Tips for opening a student bank account

Here are 10 things you need to bear in mind as a student when opening your account:

1. Banks want students

Banks are desperate for you to choose them! Students are usually young and likely to have a decent financial future. Banks are more than happy to invest in students by giving them a range of incentives and freebies.

It is important to look beyond this when searching for your bank account and focus on what really matters.

2. A bank is for life, not just for University

Or is it? Statistically, once a student has opened a bank account they will be loyal to them for the majority of their life. You need to bear the motives of banks in mind before you open an account.

Make sure that you won’t be locked in after graduating. Check out what banks have the best graduate accounts.

3. Can you switch student bank accounts?

And remember, you can always switch banks to get the best deal for you!

It’s your free choice to bank with who you want to. Just because you have a bank account with a certain bank before starting university, it does not mean that you have to stick with them.

4. Check those freebies

As we mentioned above, try not to fall for the freebies too much (although some are worth it).

Try and think about it rationally. If a bank is offering a free USB stick then that is not the best freebie you could get. The cost of a USB stick can quickly be made up by the bank in overdraft charges etc.

Some of the student bank accounts offer insurance on valuables for your first year free of charge. This is a great freebie, however Endsleigh insurance also offer free insurance to students living in selected accommodation. Find out more about that here.

5. Find out which student account has the best 0% overdraft

The amount of interest-free overdraft should be your first priority. Students can borrow money throughout their degree with no interest until they graduate. This offer is better than anything else as a student, especially when money is tight.

Even if you don’t use your money straight away you can put it in a savings account to earn you a bit of extra crust whilst you are studying at university. Check out the savings tab at the top for more info.

6. Can you get the full overdraft amount instantly?

The advertised overdraft is often the maximum you can get in your final year. Depending on your credit rating, banks often fall short of offering students the full amount.

Make sure that you know which bank offers the best 0% overdraft amount and whether it is guaranteed or not. Then find out how much you are allowed to go up to each year.

If you do not know what your credit rating is then you can check it here for free.

7. Invest any unused overdraft

Invest any unused overdraft in a flexible savings account. You will then earn interest on the borrowed money!

It’s as simple as that. Obviously, you could use it to invest in anything you choose.

8. Think ahead to your graduate bank account

Always be aware of the interest rates on the overdraft once you graduate.

Some banks allow you up to 3 years to pay back your full 0% overdraft where as some force you to pay it back within a year. You can switch after graduating but unfortunately some do not allow you to.

9. Watch out for charges

Watch out for the bank charges for going overdrawn. Never spend beyond your means.

These charges can really sting you and make you get into a debt spiral.

“At university you should do everything to stay out of debt as it can affect your studies.” (Jake Butler, Save the Student!)

10. It’s down to you

At the end of the day it is your choice and each bank account will suit every single student for different reasons.

You should make your decisions based on the statistics on this site as well as other leading student finance sites such as Save the Student!

The key is to read as much as you can and then make an informed decision. However, if you like to make a one off simple choice then the banks are all ranked on our homepage. Just choose number 1!

For more information you should check out the homepage which has the best student bank accounts as well as the best of the rest.

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!

By students 2

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