Top student bank accounts

If you or your children are joining them, finding the right student bank account is vital. And while the freebies that often come with them can be tempting, it's important to think about the bigger picture.

Ruth Bushi, editor at, says: "If money's going to be tight, forget the freebies when choosing a student bank account. You'll get more mileage out of a 0%, fee-free overdraft, so shop around for the biggest guaranteed buffer.

"It'll cover you in a cash crisis and, unlike other loans or a graduate account, you'll only pay back what you borrow if you stay within the limit. A £1,000 in back-up funds is worth more than a discount card or gig tickets, and is way more flexible."

Here's the Moneywise guide to student accounts.

Most banks let you open a student account if you're over 17 and heading to university. To qualify for a credit card or the generous interest-free overdrafts on offer you'll probably need to be 18 and have lived in the UK for at least three years.

Moneywise and Andrew Hagger of MoneyComms have looked at each of the high street bank's student offerings and rounded up the best deals for borrowers, earners and freebie hunters.


HSBC offers up to £3,000 interest-free overdraft, and has no charges for going over your credit limit. In your first year you'll also get 2% interest on credit balances of up to £1,000.

The associated credit card has a £500 limit, and charges 18.9% APR. This should only be used in emergencies, and balances should be cleared as soon as possible, because there is no interest-free grace period on purchases.

As a bonus of the student account, HSBC offers a £60 Amazon voucher to new customers, and discounts on the new Amazon Kindle Fire.

Moneywise Verdict: With a big overdraft, 2% credit interest and the sign-up bonuses, this one's the best all-rounder.

Santander 123 Student Account

The student version of Santander's flagship 123 account has a £1,500 interest-free overdraft. If you study for longer than three years, this rises to £1,800 in year four and £2,000 in year five. There's a £5 daily charge if you exceed your overdraft limit.

The account's got the best interest rates for larger in-credit balances too. You'll get 1% on interest on between £100 and £200, 2% between £200 and £300 and 3% on balances between £300 and £2,000.

There are no fees for the account (unlike the non-student version) and to tempt you in you'll get a four-year student railcard, knocking a third off your train fares.

Moneywise Verdict: It's the only account offering the coveted student railcard, which costs £30 a year or £70 for three years, and it pays the most interest overall if you've got an in-credit balance. If you're expecting to go overdrawn regularly, you would be better off elsewhere though.


There are no sign-up gimmicks with the Halifax student account and it has a generous £3,000 interest-free overdraft if you qualify for the full amount.

The interest rate for unauthorised overdrafts is 24.2% EAR. In-credit balances receive 0.1% interest, paid monthly.

There's also the option to take the Halifax student credit card, which has a £1,000 credit limit at 19.9% APR. Again, there is no introductory 0% on purchases period.

Moneywise Verdict: No frills and a poor in-credit interest rate but if you're expecting to go into your overdraft you won't be lent more elsewhere.


NatWest's and RBS's student accounts have a £2,000 interest-free overdraft, though it's capped at £500 for the first term. Applicants will need to make sure this is their main account – in practice that means paying in £750 twice a year and making three debit transactions a month. You won't get any interest for balances that are in-credit.

There's a student credit card on offer too. The credit limit is up to £500 with an interest rate of 18.9% APR.

Both include a National Express Young Persons Coach Card, which gets a third off coach travel for four years. The NatWest account also has a CashBack Plus scheme, meaning you'll get 1% back on spending in some retailers.

Moneywise Verdict: It's a good all-round account but not outstanding in any one area. If you travel regularly by coach you'll save with the discount card.


Lloyds has a £500 interest-free overdraft for the first six months, rising to £750 for the next three, and then £1,500 until the end of the third year. If you're studying for longer you'll get a £2,000 overdraft for the next two years. Go over the limit and there's a £6 monthly fee, plus 8.2% EAR interest. You won't receive any interest for in-credit balances.

The Lloyds student credit card charges 19.9% APR and will provide a credit limit of at least £500, subject to credit status.

Sign up with Lloyds and you'll get a three-year NUS Extra card that gives you various discounts including 5% off at Amazon.

Moneywise Verdict: Not bad, but there are better deals elsewhere.


Has a £1,500 interest-free overdraft, which lasts for either the length of your degree or the first six years if you're studying for longer. For the first six months this is capped at £500, and it's £1,000 for the next three. Go over the limit and you'll be charged 8.2% EAR interest.

There's no sign-up bonus but there is a generous 5% interest rate on in-credit balances up to £500.

There is a 19.9% APR student credit card available that has a £500 limit.

Moneywise Verdict: There are better deals elsewhere. The 5% interest is good if you've regularly got a small balance, but the most you'll receive is £25 a year, before tax.


Barclay's Student Account has a £2,000 interest-free overdraft, capped at £1,500 for the first year. If you go over the credit limit there's a 5p0 daily fee if the balance is under £2,000, which rises to a pound if the balance is higher.

There's no in-credit interest, but students with regular earnings could be tempted by Barclays Blue Rewards. There's a £3 monthly fee, but you'll get paid £7 a month if you deposit £800 a month, register for online or mobile banking and set up two monthly direct debits.

There's no student-specific credit card but account holders can apply for other Barclays products.

All student account holders also qualify for SmartSpend cashback from various retailers, including Topshop, Oasis, Boots and Waterstones. They can also access Barclay's LifeSkills finance and career tips online.

Moneywise Verdict: Regular earners will get £48 a year after fees, and the overdraft is one of the better available.

What is a credit rating?

If you ever want to borrow money, whether in the form of an overdraft, credit card, or any other loan, a lender will look into your credit history to find out what type of borrower you are. The lower the risk of you not repaying the debt, the better the rating you will be given by a credit rating agency (Experian, Equifax and CallCredit are the biggest three).
Not many students have experience of credit before going to university, so this is generally when they will first apply for an overdraft or credit card.
With no history to check against, all the ratings agencies or lenders can go on when assessing an application for credit are things such as whether you have a student loan or part-time job. Credit ratings are extremely important later in life, when buying homes and applying for mortgages, for example. So it's good practice to always make sure you stick to the terms of any loan agreement by not exceeding authorised overdrafts or missing payments. If you don't, your credit rating will suffer and you will find it harder to borrow money in the future.
Try to check your rating regularly, which you can do through the ratings agencies, using free trials (always remember to cancel these within the time limit to avoid paying a fee) or by paying a one-off fee of £2).

What you need to open a bank account

  • Up to two forms of photo ID, such as a passport or driving licence
  • Proof of address (your parents' house usually but you can add your term address to the account later)
  • Proof of student status, such as your university acceptance letter or UCAS offer letter.  

One final tip from Ruth Bushi: "If you're nailing your money management and don't need to get at the [interest-free overdraft] cash immediately, transfer your overdraft funds to a savings account to have it earn you some interest. The bottom line is that this is 'free money' while the overdraft is 0% interest but obviously it will need to be repaid eventually. So make sure you plan ahead."


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Hi I can see this  subject is bit old but I decide to post this is the problem I have LLOYDS IOM OFF SHORE  restricted my account no warning no explenation ..around 60 000 poudsn got taken my internet ,phone banking mail statements everything got cut ..did complain to in house customer service help there they gave me some round a round answer ..I think this person who answered my complain just does not care and has no power...two people dealt with my case ..both pretty mean man and one reasoning with them..obvious bias..women got really irritated that I kept calling about my accounts and persuaded on shore LLOYDS to cut my services as well..I got it back ..they said they got direction from this person but realised no problem with my accounts ...Now I been banking with LLOYDS for 25 years issues ,no debt,no direct debit set up,I dont owe any payments for anything ...physicaly last time I was in UK was 1996 ..and last year after 20 years I came to visit some friends there...never put large amounts of money into those accounts ...didnt do any transfers outside LLOYDS ..actually those 3 accounts I have/had with LLOYDS mostly been dormant ...i think I put maybe around 5000 pounds to those accounts over the period of last 11 years ..took out maybe 22 000 over the same period of time all standards very low money traffic but newertheless I got singled out for EDD and high risk !!! I have to fight to get my money back somehow..does anyone had/has same experience with LLOYDS IOM OFF SHORE ??