Student bank accounts: how to choose

Student bank accounts: how to choose

With 'A' level results due out this week, we take a look at the student bank accounts on offer.

Written by Melanie Tynan on 15 August 2012

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Today is 'A' level results day across England, Wales and Northern Ireland. Scottish students got their results last week.

For those heading off to university this autumn, one thing they need to think about is which student bank account to choose. 

We've taken a look at the accounts available from the main banks and offer some help and guidance on choosing the right account. 

Choosing a student bank account

Deciding which account to go for can be tricky as the banks all offer slightly different deals. The key to making the right decision is not to be side-tracked by the special offers.

The most valuable feature of a student account is the interest-free and fee-free overdraft facility and it's this you should concentrate on when choosing an account.

Most banks advertise an overdraft 'up to' a particular amount. For example, an interest and fee-free overdraft up to £1,500 in the first year, £1,750 in the second year and £2,000 in the third year. 

But be careful. With these types of deals, there's no way of knowing how much you'll actually get until you apply. The bank will credit check you and decide the size of overdraft it will offer.

But there's nothing to stop you applying to two or three banks initially to see which one offers the best deal. 

HSBC guarantee you an overdraft of £500 and Santander one of £250.

Halifax and HSBC have the biggest overdraft limits. They both advertise a flat £3,000 maximum fee and interest-free overdraft. 

Student bank accounts

The table below shows the accounts available from the main banks in alphabetical order. Our extended table has more details. 


Free overdraft (£)

Guaranteed overdraft?




Co-operative Bank

£1,400 (yr 1), £1,700 (yr2), £2,000 (yr3+)


Clydesdale/Yorkshire Bank

£1,000 (yr 1)

£3,000 (yrs 2+)







£500 (1)

Lloyds TSB

£1,500 (yrs 1- 3), £2,000 (yrs 4-6)




£1,000 (yr 1), £1,250 (yr 2), £1,500 (yr 3),

£1,750 (yr 4), £2,000 (yr 5)



£1,500 (yrs 1-3), £1,800 (yr 4), £2,000 (yr 5) 

£250 (2)


£1,400 (yr 1), £1,700 (yr 2), £2,000 (yr 3+)


Ulster Bank



(1) Guaranteed £500 interest and fee-free overdraft at account opening. Up to £3,000 subject to status. (2) After credit check you get an immediate overdraft of £250. You must then pay in £500 to access your full overdraft amount. 

MoneyVista tips for choosing a student account

  1. Check what size of interest and fee-free overdraft is available. You might not get the maximum amount advertised.
  2. Decide what type of organisation you want to bank with. Most student accounts are offered by the big banks but there are some other options such as The Co-operative Bank which is run on behalf of its members and has an ethical policy. 
  3. Check what fees and interest you'll pay if you exceed your interest-free and fee-free overdraft. Some let you apply for an arranged overdraft at a reasonable interest rate. Others tip you straight into unauthorised overdraft with hefty fees to pay.
  4. Look at the other services they offer and decide if these are important to you - for example, alerts when you're reaching your overdraft limit, budgeting tools, optional student credit cards and mobile banking apps.  
  5. If you'd like access to a branch, check out which ones are available on campus or nearby
  6. Check the eligibility requirements. Most banks require you to use your account as your main account. Some require you to make a set number of transactions. Others have requirements about how much you should pay in to your account and how often.

More on student finance

You can read more about student finance issues in our range of guides:

If you're new to MoneyVista and interested in planning your financial future, click on 'Build a plan'. Our  quick tour video  shows how MoneyVista can help with your finances.

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