Biggest 0% Guaranteed Overdraft Student Bank Accounts
BIGGEST 0% GUARANTEED OVERDRAFT BANK ACCOUNTS
Be careful when shopping for a student bank account, especially if you’re going to make your decision on who to bank with based on the overdrafts they have on offer.
First off, you should be sure to find a bank that offers interested free overdrafts, because lots of banks offer them to their student customers. When you’ve identified the banks who offer these interest free overdrafts you need to do a little digging to see which ones offer the biggest overdraft facility. This can sometimes be confusing because some banks say “up to” X amount (like HSBC), whilst others say “guaranteed” X amount (like The Co-operative). This crucial clause could end up causing you a head ache further down the line, so ensure you check exactly how much you’re guaranteed to get from your bank.
The term “guaranteed” can be a bit misleading also, because not everyone will be granted a student account with an overdraft. Certain criteria in your credit history will be used to form a credit score, and there’s every chance that your bank may decline your request to open an overdraft with them. The term “guaranteed” refers to an overdraft amount that you’re certain to get, should the bank decide to approve you for an overdraft. The biggest 0% guaranteed overdraft bank accounts include:
The Co-operative – they offer a massive £2,000 guaranteed overdraft by the time you get into your third year of Uni. In the first year you’ll receive an overdraft of £1,400, and in the second year you’ll receive an overdraft of £1,700. To be eligible for the 0% overdraft with The Co-operative bank you will need to deposit £300 into your account when you open it.
Natwest/The Royal Bank of Scotland – these two banks offer a guaranteed overdraft sum that is slightly lower than The Co-operative’s deal. A tiered overdraft of up to £1,000 is applied in the first year, an overdraft limited of £1,250 is applied in the second year, and an overdraft of £1,500 is available in the third year. There are also some bonuses offered, depending on where in the UK you live, and whether or not you’re an existing customer.
HSBC – HSBC are currently offering a guaranteed amount of £500, however this amount could rise to £3,000, depending on whether or not your requests for more are approved. Some people may assume that taking out an account with HSBC is a better idea in the long term based on face value, however when you dig deeper and establish The Co-operative are offering a guaranteed £2,000 0% overdraft, whereas HSBC only offer £500 guaranteed, it’s clear to see which deal is better.
Looking for a bank that offers a large overdraft should not be an excuse to get yourself into debt – overdrafts should only be touched when you have no other option, for example when funds obtained through grants or loans are depleted. Students in the first year who haven’t got the hang of budgeting may find overdrafts particularly helpful whilst waiting for grants or loans to come in, however you should avoid dipping into your overdraft where possible – even if it is free whilst you’re in University.
Once you’ve finished University you might be surprised to know that 0% overdrafts are still available from some banks who offer specialist graduate accounts. Some banks, including The Co-operative may even allow you to keep your student account for a set period after graduation in order to keep benefiting from the 0% overdraft. If you this is not possible with your bank, look at switching to a bank offering special graduate accounts – you could end up saving a lot of money on overdraft interest fees!
