Flying the nest soon and looking for the right account for your time at university? Read about the pros and cons and the incentives attached to student accounts
There’s lots to consider and organise before you leave for university. And if it’s your first year as a student you’ll need to consider opening a student current account.
You may be wondering how student bank accounts work and how they differ to standard current accounts. A student current account is a type of bank account designed for students in higher education. They’re fairly similar to standard current accounts but can come with extra features like interest-free overdrafts and perks, such as railcards and discount vouchers.
There isn’t a specific time you should set up your student account, but you may want it ready to go for when you start your course. That way, you’ll have access to all the features of a student account when you begin your studies and know where you’re at with your finances - particularly if you’ll need access to an overdraft.
You’ll need to provide proof of your student status when you apply, so it may be worthwhile to set up your student account as soon as you’ve received your unconditional offer and confirmed your place at university. Just make sure you have approved your place at university beforehand and all your entry requirements have been met before you apply for your student current account.
To open a student bank account, you’ll need the following information to hand:
Most banks will allow you to apply online. But don’t forget to send off your supporting documents. When your new student current account is open, remember to update your Student Finance account with your new bank details. Your Student Finance Account is the hub where you can see your statements and letters about your maintenance loan or grant from Student Finance England.
The best student account will depend on what features are most important to you. Think about the following things when choosing an account:
When you apply for a student account (or if you need to request an increase on your overdraft) you’ll receive a credit check to look at your credit history and how well you’ve managed credit in the past. If you have a history of unpaid debt (or unpaid ‘buy now, pay later’ payments), you could find it difficult to be approved for a student account.
If your student account application hasn’t been approved, a basic bank account may suit your situation better. Basic bank accounts work in a similar way to current accounts, only with less features. You'll still be able to withdraw and deposit money but you won’t be offered an overdraft or cheque book.
Depending on the student account you have and when you’ll graduate, you may be able to increase your authorised overdraft. Whether you can increase your overdraft limit will depend on your bank’s terms and lending criteria, as well as your borrowing history and financial situation. If you’re looking to increase your overdraft limit, contact your bank for more information.
If you go over your agreed overdraft limit into an unauthorised overdraft - you’re likely to face interest charges and your payments could be declined.
How much you’ll be charged will vary depending on your bank and how much you’ve overspent – and how long you stay in your unauthorised overdraft, so it’s important to check this with your student account provider.
If you’re having financial difficulties, it’s important to speak to your bank quickly and explain the situation. It should be able to help by increasing your authorised overdraft or offering alternative solutions to help until your finances are back on track.
Unfortunately, international students aren’t usually able to take advantage of some of the benefits included in student current accounts, such as an overdraft. Instead, you will be able to open a standard current account with most banks if you’re in the UK for more than six months. Want to learn more about how current accounts work? Check out our guide to current accounts.
Once you’ve graduated from university, your student account will convert into a graduate account, which is similar to a standard current account. Your existing student overdraft may be transferred over to your new account (meaning it will stay at 0% interest for a few years) and you may be able to apply for an arranged overdraft limit on top.
In some cases the bank may ask that you start to reduce your agreed overdraft limit over a period of time, depending on your work and income status.
It’s quick and simple to find the right student current account for you when you compare with MoneySuperMarket. We can show you a broad range of accounts from across the market and searching won’t affect your credit score.
We’ll need to know you’re aged 18 or over, have been accepted onto a full-time UCAS course with a duration of at least two years, at a UK institution, and you don’t already have a student account. You can compare student accounts by features such as overdraft limits, and customer service ratings as well as seeing any additional perks, such as discounts and rewards.
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