The Best Student Bank Accounts For 2021
One of the biggest changes in your life when moving to university is that you are looking after your own finances and budget, possibly for the first time in your life.
If you don’t have a bank account yet or you are looking to switch to a student bank account, it can be daunting and bewildering to find the right fit for you.
There are loads on the market to work your way through and we thought we would do our bit to help you out by putting together a list of the best student bank accounts for this coming academic year.
How To Choose A Student Bank Account
A student bank account is an account that is exclusive for students.
They differ from the standard bank accounts that are on offer and often include free promotions and interest-free overdrafts.
You do have to prove that you are a student to open a student bank account.
We have a few tips on how to search for the perfect student bank account:
- Don’t be bowled over by the free promotions – you might be offered travel discounts and savings cards, cash rewards and exclusive offers, but be sensible and think about the long-term and the real benefits to the account rather than a short-term reward.
- Take the largest overdraft – an overdraft is the easiest and best way to borrow money, and the best thing about a student overdraft is that it has 0% interest for your time at university, so make the most of it.
- Understand overdraft repayments – as great as the interest free overdraft is, you’ll have to understand how to pay it back once you graduate, so understand the repayment terms now and plan ahead.
The Student Bank Accounts For 2021
1. HSBC Student Bank Account
0% overdraft up to £3,000.
It begins with £1,000 in year one and goes up £1,000 per year. It is one of the largest overdrafts you can find on the market today.
The incentives to sign up are also pretty good, with an £80 cash incentive and a choice of either ASOS Premier Delivery for an entire year or a £20 Uber Eats voucher.
The HSBC student bank account is our choice as the number one for this coming academic year.
2. Santander 123 Student Account
A 0% overdraft that goes up to £2,000 after 5 years (Begins with a £1,500 overdraft in year one).
Most students do get the full £1,500 overdraft to begin with, depending on your credit rating, and this puts it above many other student bank accounts, even if it is only half the amount others advertise.
You must deposit at least £500 to receive this.
The sign-up incentive is a good one, the four-year 16-25 Railcard, worth £100, gives you a third off all train travel in the UK.
3. Nationwide FlexStudent Account
A student overdraft that begins at £1,000 and goes up to £3,000 in third year, at 0% interest.
This is looked at as one of the best student bank accounts this year, as it offers one of the largest overdrafts on the market.
The only downside is that there is no sign-up incentive as it currently stands, but the service is excellent, making it one of the most popular around.
4. The Co-operative Student Account
This 0% student overdraft starts at £1,400 in the first year of university and rises to £2,000 in year three.
You must deposit £300 within the first 28 days of opening the bank account to be eligible for the full overdraft amount and that £300 must also stay in the account for at least 48 hours after it has been deposited.
Again, there are no freebies or incentives as such, but it is a highly rated student bank account where most students say they do receive the full advertised amount.
It also has fantastic customer service, which makes it a standout in our book.
5. TSB Student Account
This tiered student bank account offers a 0% overdraft of up to £500 in the first six months, which goes up to £1,000 for the next three months and the full £1,500 after that.
If your credit score is fine, you’ll have a good chance of receiving the full, advertised overdraft by your second year, but you might have to pester them a bit to increase your overdraft limit once you are eligible.
You’ll earn 5% interest on balances up to £500, but there are no other freebies or real incentives with this bank account for students.
6. NatWest Student Current Account
You’ve got quite a good chance of receiving the full £2,000 overdraft with the NatWest student bank account.
You’ll start with £500 in the first year and straight up to £2,000 in your second year of university.
There are two sign-up incentives this year. The first is £50 in cash and the other is a Tastecard that lasts for four years.
This provides you with discounts in many restaurants and is worth about £140. This has some of the best incentives of all the student bank accounts in this list.
7. Barclays Student Additions Account
Another tiered overdraft that starts with a generous £1,000 in your first year and increases to a total of £1,500 in the second and third year.
You do have to explicitly ask for the overdraft to be increased, it does not happen automatically as with some other student bank accounts.
The incentives are pretty good, including a 12-month subscription worth £96 to Perlego, an online book library, which might come in handy.
8. RBS Student Account
The overdraft is limited to £2,000 in your final year, but your chances of receiving it are pretty high in comparison to some other student bank accounts.
It starts with £500 in the first year and you must deposit £750 into the account every six months to remain eligible.
You must also make at least three transactions each month to keep the overdraft facility. The sign-up incentives are the same as NatWest, £50 cash and a four-year Tastecard.
The free gifts are good, and the tiered overdraft system is always the best choice financially, but you might find better accounts with larger overdraft facilities.
9. Halifax Student Current Account
This student bank account has an overdraft advertised for up to £1,500 in your first year, but most students are unlikely to get that straight away.
In most cases, you’ll have to keep on asking the bank to increase your overdraft and every case is dealt with on individual merit.
You’ll also notice that there is no free gift or sign-up incentive, although you do get some cashback offers within some retail stores.
10. Lloyds Student Current Account
This 0% overdraft eventually rises to an amount of £2,000, beginning with £500 for the first six months, £1,000 for the next three and £1,500 after that.
The £2,000 overdraft limit is for students who are studying between four and six years. Most students do receive the full amount after year one.
There are currently no free offers with this student bank account. Lloyds is a good choice for those students with a poor credit score, as most applicants do receive the full overdraft amount.
What About International Student Bank Accounts?
For international students moving to the UK, there is a need to think about the best student bank accounts in a slightly different light.
If you are an international student, you will not be eligible for an overdraft or the freebies and promotions that you’ve seen above with the best student bank accounts in the UK.
If you are applying for a current account or a student account in the UK as an international student, you will need the following items to fulfil the application criteria:
- Your current passport
- A valid visa
- Student ID or the acceptance letter from your UK university
- Proof of address in the UK
- A bank statement from your current bank account in your home country
What are the best international student bank accounts?
1. Nationwide FlexStudent Account
One of the few student bank accounts that is also available to international students.
The transfer fees with this account are the lowest you’ll find on the market, you can send and receive money in any currency, and from any country in the world, for free.
You must have proof of address to open an account however, so you might need to have moved into your student accommodation before applying for this student bank account.
2. HSBC Bank Account
HSBC markets its bank account service to any person studying in the UK, whether they are from overseas or this country.
It does come with an overdraft, but as this isn’t a student specific bank account this is not interest free.
Sending money abroad to other HSBC accounts is free, as is sending money to any bank account in EEA countries, with a £4 charge to other countries and currencies.
Receiving money costs £6 or £8 for amounts over £100, depending on whether it is in pounds or other currencies.
It is easy to open a UK account if you already have an HSBC account in another country.
3. Natwest Select Account
In the past, NatWest did offer a specific international student bank account, which came with sign-up incentives. However, this was scrapped, but this select account is a good choice of bank account anyway.
There is an option of an overdraft, and it is free and open to use, with no requirement for monthly fees to maintain the account.
The international transfer fees are very low, and you’ll only pay if you need money sent very quickly.
4. Barclays Student Additions Account
Like Natwest, Barclays used to have a specific bank account for international students, but it has since been scrapped.
The difference here is that Barclays allows international students to apply for their normal student bank account.
It has an interest-free overdraft facility, up to as much as £3,000 in third year of university.
You’ll also get the 12-month subscription to the online library Perlego.
Fees for international transfers are also low, with costs only attached to £8 for amounts over £100 received in any currency.
5. Al Rayan Personal Current Account
If you are looking for a current account that is Sharia-compliant this is the bank account for you.
If you don’t have a UK passport and the UK is not your main residence you will have to pay in at least £20 per month to maintain access to the account.
For international money transfers, you must transfer at least £100 to gain access.
It costs £25 to send money sterling abroad, €40 to send euro abroad, $40 to send US dollars abroad, and £12 for amounts under £10,000 in other foreign currencies. It is free to receive money from abroad in all currencies.
Al Rayan also has a Sharia-compliant savings account if you are considering staying in the UK for longer than your university studies.
There are loads of student bank accounts on the market today, and there could be different perks and promotions that make sense for you, whether you are moving to a new city in the UK to study or looking for an international student bank account before you move to the UK from another country. We hope we’ve been able to help you with this list of the best student bank accounts in 2021.
If you’re looking for ways to manage your money, we have a blog on how to budget as a student, make sure to check it out!