The last thing on your mind if you’re starting university this month is probably a bank account.
Often the easiest option is just the one nearest to you – I opened my account (many years ago) because Barclays was the bank on campus.
But with most of your interactions probably being digital, that’s not really something most people need to worry about.
So you may instead think you’ll go for one of the app-only banks. The likes of Monzo, Starling and Chase are all great accounts when it comes to managing your money.
I’d certainly suggest getting one and using it for day-to-day banking.
But this doesn’t need to be your only account. The major banks all have specific accounts that offer extras only available to students.
Take a few minutes to check these out and you could save yourself a lot of cash, not just now, but over your whole degree.
The most enticing accounts are the ones that come with freebies. There’s free cash, railcards and more available as the banks hope you’ll join at 18 and stay for life.
However, think of these as a sweetener, not the reason you choose a specific bank. You’ll be much better off going for the bank offering the most suitable interest-free overdraft.
Hopefully you won’t need to use it, but uni is expensive and even maintenance loans, help from parents and part-time work might not be enough to cover increasing living costs.
So having access to this cheap borrowing will prevent you from looking at credit cards, Buy Now Pay Later and loans that might turn into expensive debts.
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Of course you do have to pay the money back, but there’s time to do this once you graduate – though you should always try to clear debts as quickly as possible. Most will remain at 0% for a few years, though the overall amount will gradually reduce.
The best overdraft for you will depend on your circumstances. Some offer a guaranteed amount, others offer ‘up to’, so you could get less than the headline amount. Each have benefits. Personally I’d look at it from a budgeting point of view.
Getting all the money for your whole degree in term one could be disastrous if you aren’t confident with budgeting, or think you’ll be tempted to splash it all. So you might be better to go for one which increases each year, though this could result in you having a larger debt to repay in the end.
And for those that feel confident they’ve got enough money coming in that they won’t need to use this overdraft, it still makes sense to get it.
Andy’s Best Buys: Student current accounts
Looking first at overdrafts, you’ll get a guaranteed £1,500 from Santander. Nationwide and HSBC offer up to £1,000 each year so you could get up to £3,000 over a three-year degree.
After this, look at the freebies which have improved a lot this year. Two banks (Nationwide and HSBC) will give a free £100 to spend as you wish. Nationwide also gives £10 to Shelter.
Elsewhere, NatWest has a lower £80, but you also get a four-year Tastecard. Or you could opt for the free four-year railcard offered by Santander.
I’d lean towards the larger cash sums as you can use them as you like. Even if that means buying a railcard or Tastecard, you’ve got the freedom to hunt around for additional savings.
You’ll only be able to get one of these student-specific accounts, so choose wisely!
Latest cashback credit card best buys
Nationwide Overdraft up to £1,000 each year.
Freebie £100 cash + £10 donation to Shelter.
HSBC Overdraft up to £1,000 each year.
Freebie £100 cash.
Santander Overdraft, £1,500.
Freebie Four-year railcard.
NatWest £500 in term one, up to £1,500 extra after.
Freebie £80 and four-year Tastecard.
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Andy Webb is an award-winning blogger and podcaster from Be Clever With Your Cash. Follow Andy on Twitter, YouTube and Instagram via @andyclevercash
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