Top Student Bank Accounts for 2012
Banks are always tweaking and changing the accounts they offer; changing terms and conditions and adding more perks and “freebies” to entice new customers. When looking for a student bank account you need to pay particularly close attention to things like overdraft interest rates, overdraft amounts, and also charges should you go over your overdraft limit. Bank charges tend to mount up pretty quickly, so be savvy when opening a new student account and ensure you know exactly what the deal is. Here are what we consider the top three student bank accounts available at the moment:
The Co-operative – at the time of writing The Co-operative offer the biggest 0% overdraft of all the high street banks. Like most other banks they offer a tiered overdraft system, with an overdraft of £1,400 in year one, £1,700 in year two, and £2,000 in your third year. The only downside to The Co-operative’s student account that we can see is that you need to deposit £300 into your account in order to get the overdraft facility. That said, those receiving student grants or loans should have no problem meeting this figure. If you need to go over the 0% interest overdraft maximum your overdraft will be charged at a rate of 9.9%APR – but if this is an unarranged overdraft, the cost shoots right up to 15.9%. Try to avoid unarranged borrowing, and do your best to avoid going over the threshold for their 0% overdrafts. Although no graduate accounts are currently on offer from The Co-operative, they do allow graduates to keep their student account with the 0% overdraft for a year after graduation.
Natwest/The Royal Bank of Scotland – the deals offered by Natwest and sister bank the Royal Bank of Scotland are much the same. There’s a tiered guaranteed 0% overdraft of up to £1,000 in the first year, £1,250 in the second year, and up to £1,500 in the third year. The 0% overdraft in the first year is broken into three parts, with an overdraft total of £500 in the first term, £750 in term two and £1,000 in the third term. For existing Natwest customers who upgrade to the student account, you’ll get a free student Railcard – normally costing around £100 these offer 30% off train travel. For RBS customers living in Scotland the perks include a travel pack containing a student Railcard and also a 4 week bus pass for use on certain Scottish buses. Those RBS customers living in England ort Wales are not entitled to these bonuses, however. To keep the overdraft you must deposit £750 in your account every 6 months – and you must also make three transactions every month. For those receiving student grants or loans, this is criteria that shouldn’t be hard to hit.
HSBC – the HSBC are offering an eye catching £3,000 overdraft with 0% interest, but if you read a little closer you’ll see that this is an “up to” figure. In the beginning you will only be granted a £500 overdraft, and it’s up to you to then go back and ask to increase this limit as required. Remember this limit is not guaranteed – so there’s a chance you may end up stuck on the minimum guaranteed overdraft amount of £500, which will not be big enough for some people. For those who expect to deposit over £1,000 in the account during the first year, the HSBC account is worth bearing in mind due to the relatively generous 2% interest they pay on the first £1,000 paid in (must be within the first year, however).
These are not the only student bank accounts available, however they are what we feel are amongst the best on offer right now. The market for student bank accounts is very competitive, so be sure to shop around and research the market to find the student account that suits you best, and offers you the greatest deal.
