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What is a Student Bank Account?

What is a student bank account and why should you get one?

Victoria Russell
Written by  Victoria Russell
5 min read
Updated: 23 Feb 2024

All students need a bank account to help manage their finances during their studies, but a dedicated student account can provide you with helpful extra features, such as an interest-free overdraft. Our guide explains what makes them different and how they can benefit you

What is a student bank account?

A student bank account is a bank account tailored to meet the needs of students. It typically offers benefits, such as interest-free overdrafts, and other perks, like cashback or free student railcards, that make it different from other current accounts.

student at desk

What makes a student bank account special?

Student bank accounts are designed with the unique needs of higher education students in mind. They come with a variety of features and incentives that can help you during your university years:

  • Interest-free overdrafts: This is a key feature of student accounts, allowing you to borrow a set amount without incurring interest.

  • Exclusive deals: Some accounts come with perks like a free annual railcard, which can save you significant money on travel.

  • Lower fees: Students often enjoy reduced charges on various banking services.

  • Financial advice: Many banks offer specialized services to help students manage their money effectively.

Eligibility: are you qualified?

To open a student bank account, you generally need to be 18 or older with an unconditional offer from UCAS for a full-time course at a UK university. Some banks may require a UCAS status code or proof of enrolment. It's important to check the specific criteria for the bank you're interested in, as they can vary.

Specific Eligibility Criteria for Part-Time Students: The eligibility criteria can differ for degree-equivalent, postgraduate, or part-time courses and it may be more difficult to get a student account if you are a part-time student.

UCAS Status Code for Verification: Some banks may request your UCAS status code for verification of course acceptance.

Advantages of having a student account

There are numerous advantages to having a student bank account:

  • Extended overdraft limit: As you progress through your studies, you might be able to increase your overdraft limit.

  • Discounts and cashback: Enjoy savings at popular retailers or cashback on your spending.

  • Student-specific services: Get access to financial planning and money management advice tailored to students.

Potential pitfalls

There aren’t many disadvantages to student bank accounts. But if you misuse the interest-free overdraft, it can lead to extra debt which could harm your credit rating. It's crucial to use this feature responsibly to avoid financial difficulties down the line.

How to apply for your student account

Applying for a student bank account is straightforward. Start by using MoneySuperMarket to compare available accounts. This will give you a clear picture of what's on offer, including key features and benefits. Once you've chosen an account, you can apply online and provide the necessary documentation, such as student ID and proof of address.

Step-by-Step Application Process: Provides a detailed step-by-step approach to applying for a student bank account, including comparing available accounts, applying online, and providing documentation.

Perks: free railcards and more

Some banks offer free 16-25 Railcards as an incentive, which can knock up to one-third off train journeys. It's worth looking into the various perks available when choosing your account.

Railcard Details: Provides more detail about the free 16-25 Railcards, including the potential savings on travel.

Credit concerns

A credit record is a history of your past financial transactions. As a student starting out in life, banks understand that you might not have much of a credit history. This usually isn't a barrier to opening a student bank account, even if you have no credit history at all.

Credit Record for Mature Students: Addresses concerns for mature students who may have bad credit and how it could affect their eligibility for a student account with an interest-free overdraft.

Beyond the basics

When opening a student bank account, it’s also a good time to think about what student insurance you might need. Ensuring you have the right coverage in place before you begin your studies can save you from unexpected financial strains.

The importance of a National Insurance Number

Your National Insurance Number is often required for financial transactions in the UK. If you don't have one, you can apply for it. This number is crucial for setting up your student bank account and for future employment.

Looking to the future

Once your studies are over, your student bank account will likely transition to a graduate account or a regular account. It's essential to understand the terms of this transition and how it will affect your finances.

Details on Account Transition Post-Studies: Explains that when students finish their studies, the account usually changes to a graduate account or regular bank account after a grace period.

Financial safety net

Remember, the Financial Services Compensation Scheme (FSCS) protects up to £85,000 per customer per bank. This means your money is safe up to this limit, giving you peace of mind as you focus on your studies.

Other useful guides

Ready to find your student account?

If you’re looking for a student account, then MoneySuperMarket is here to help. With our comparison tool, you can easily see all the options and apply for the account that best fits your needs.

Embarking on your higher education journey is an exciting time, and having the right student bank account can make all the difference. With the right tools and information at your disposal, you can manage your finances with confidence and focus on what really matters—your education.