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Student Bank Accounts 2012

Find the Best Student Accounts, Deals and Financial Advice Online! was launched at the end of 2011 by a number of post-grad students, and it will soon become the No.1 comparison website for UK student accounts, overdraft facilities, University budget guides and student loans.

Our website is currently in development right now (with a brand new funky design planned for early 2012), however feel free to browse our existing articles and content for the time being.

Student Finance Guide:

What are Student Bank Accounts? 

A student account is designed for those who are pursuing their higher education. Such accounts allow students to deposit money and make payments like regular current accounts. In addition, student accounts offer distinct benefits over a standard current account such as interest free overdrafts and welcome offers. Through this feature, you can spend more cash than what actually exists in your account. Here are a few key features of student bank accounts:

How to Open an Account?

In order to open a student bank account, you will require a letter of confirmation from UCAS. Once you have the letter, you can apply to open a student bank account from a range of banks, which you can compare at This feature allows you to utilize your account benefits before the commencement of your university term.


To open a student account, no additional fee is required. However, in case you exceed the limit for overdraft, a hefty sum will be charged. You may have to pay about £30 every time you make a transaction in such cases.

Interests are levied on the money that you borrow from a bank. It’s also applicable on the amount that you save in bank accounts. For student accounts, interests on savings are pretty high. If you keep funds in a bank account, you end up receiving a good sum at the end of the term.

Choose an account offering the best overdraft facility 

When selecting a bank, it’s best to opt for one that offers the best overdraft facility. All student accounts provide an overdraft facility. To minimize your expenses on paying interests, opt for an account that offers the lowest interest rate possible.  This is probably the most important feature that you should look out for when choosing a student account, so try not to be swayed too easily by the welcome offers, free DVDs or £10 Free Amazon Vouchers etc.

As long as you are within the overdraft limit, no interest will be charged. You can withdraw money without paying any interest. Hence it is important that you select an account that offers zero interest rates for the longest period.

Points to keep in mind about overdrafts

Although you are allowed to borrow money even after the overdraft limit exceeds, don’t do so without the permission of your banker. The interest rates charged for those who exceed the overdraft limit without taking permission from bankers, are significantly high.

Another point to remember about overdrafts is that, the money you borrow should be paid back to the bank after completing your education. It’s best not to borrow more than what you require.


Freebies are marketing strategies adopted by banks so that customers continue banking with them. Customers also consider freebies when selecting a bank account. This happens when two or more banks offer similar overdraft facilities.  You can compare a list of freebies that student accounts offer here.

When creating a new account, additional money is offered for free by banks. The majority of banks require students to retain their loans or incomes in their accounts. Hence, there is not much scope to open multiple accounts and grab freebies.

Paying back overdrafts

Once the term for 0% interest ends, you’ll be required to pay an interest on your overdrafts. Hence, it’s best to clear the debt within the 0% interest period. The ideal way to clear your debts timely is to fix an amount and pay it every month. The best aspect about student bank accounts is that after completing their course, students are granted a year’s time to pay back the debt.

In case you opt for one of the top graduate accounts, you will be offered 0% overdraft for two to three years. The overdraft limits generally reduce every year. This gives you the opportunity to pay your overdraft back with ease before the 0% interest period ends.

In case you don’t need to borrow money, create a student account with a bank that offers AER on your balance. HSBC and Abbey National are two banks offering such benefits.

Banks credit score their customers   

When you apply for a loan, the lending bank credit scores you. This is done by all banks including those which offer overdraft facilities. Credit scores are given by banks to determine how good a customer you are. This is done primarily on the basis of your past transactional history. Banks generally don’t have much data for student account holders. Hence, it can become difficult for them to credit score their student account holders.

Are you Looking for Additional Student Money Advice?

Launched in May 2012, our sister site provides additional student money advice before, during and after you leave University. offers helpful advice on banking, funds, saving money and student travel and insurance deals.

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