Student accounts guide

If you are about to enter higher education, you are likely to be inundated with offers from the high street banks to entice you into opening an account with them. Student and graduate accounts are very similar to regular current accounts, but also offer additional benefits, such as interest free overdrafts. This guide covers the features that are exclusive to graduate and student accounts - for more information on regular bank accounts visit our current account guide.
Getting a student bank account

You would think that moving into higher education would automatically qualify you for a student account. However, restrictions are more common than you may realise. For example, some banks will insist that you are over 18 years of age and that you will be studying for a full time higher education course for the first time, with a course duration of at least two years.
Graduate accounts

Graduate accounts will differ in their entry criteria. You may find that certain banks will only offer these accounts to existing customers who have held a student bank account with them for at least three years or to those who have graduated within the last three years with a degree from a UK-based university.
Student account benefits

Student accounts offer a variety of incentives and benefits, some of which will be more useful to you than others:
Overdrafts

For many, the most valuable benefit from student accounts will be the size of the interest free overdraft that is on offer (which is dependent on your credit rating). This student account benefit is a significant advantage over a standard current account.

How overdrawn you will be allowed to go varies from account to account, with some offering an overdraft of up to £3,000 . Often your overdraft limit will increase every year, to stop you using up the entire amount at once.

When choosing between student accounts, it is also worth looking at what graduate accounts are on offer from the provider when you leave university, as you do not want to be saddled with overdraft fees that you cannot afford to pay off. Graduate accounts are a good way of easing your exit from student finance.

If you are over 18 years of age and applying for credit facilities then all banks will pass your details through their credit scoring system. This can prove a stumbling block as many students will only have a limited credit history and any missed payment history will have a detrimental effect on the outcome of your application. If you want more advice on credit ratings, take a look at our credit scoring guide.
Other student account benefits

Aside from the overdraft facility, your student bank account can offer various incentives – these will differ between providers, but often include reduced price laptops, shopping discount cards, or travel discounts. Here’s a quick list of some of the incentives that may be available:

mobile phone insurance;
discount on a mobile phone;
a preferential rate on a credit card;
laptop and technology insurance;
a top up facility for mobile phones;
commission free travellers cheques;
discounts on flights and holidays.

While these offers may seem exciting, it is worth remembering that the single most important feature will probably be the interest free overdraft facility and above all else your decision should be based upon this: and if you require branch access, a conveniently located branch.

It is particularly worth looking at student accounts in the summer, prior to the start of the new college or university year as this is when providers are looking to entice new customers by offering incentives.
Get the most from your student account benefits

Check the entry requirements for an account before you apply to avoid wasting time.
Don’t get drawn in by the extra student account benefits on offer – the interest free overdraft is more important.
Consider the long term, and what will happen once your course finishes.
Always keep an eye to see if another student bank account is more suited to your needs.

Student accounts are a great help when budgeting at university, but they aren’t the only thing you’ll have to take into consideration. Our student finance guide has more information on the financial decisions you’ll have to make as you enter higher education.