What is a student bank account and why should you get one?
A student bank account is not just for paying tuition fees, it can also offer an interest-free overdraft and a range of extra benefits. Here we explain everything you need to know.
Key takeaways
Student bank accounts are specifically for those in higher education
Unlike regular current accounts, student accounts offer unique features such as cash back and free rail cards
Student bank accounts have interest free overdrafts
When you graduate the account will change into a graduate, or a standard, current account
What is a student bank account?
A student bank account is a bank account tailored for anyone studying in higher education. 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.
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:
This is a key feature of student accounts, allowing you to borrow a set amount without incurring interest.
Some accounts come with perks like a free annual railcard, which can save you significant money on travel.
Students often enjoy reduced charges on various banking services.
Many banks offer specialised services to help students manage their money effectively.
Student bank account features:
Interest-free overdrafts
Exclusive deals
Lower fees
Financial advice
Who can open a student bank account?
Every bank will have its own rules over who can apply for an account but most have the following criteria:
You must be 18 or older
You must have an unconditional offer from UCAS for a full-time course at a UK university. Some banks may request your UCAS status code for verification of course acceptance.
You usually need to be a UK resident
Part-time or postgraduate students may still be able to apply
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.
What are the disadvantages of a student account?
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.
How to apply for your student account
Applying for a student bank account is straightforward. The following checklist shows you how:
Compare student accounts to find the right one for you. You could use 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
You will be required to show documents to confirm your identity, such as your driving licence and passport, and you may be required to show proof of your university course
When your bank has approved these documents, it will set up the account and usually send you a debit card
Will my credit be checked for a student account?
As you are applying to open an account with an overdraft, a bank will check your credit history.
Most students are unlikely to have built up much of a credit score and banks do know this – so the criteria will be lower than someone applying for a standard account with an overdraft.
What happens to a student account when you graduate?
Once your studies are over, your student bank account will likely transition to a graduate account or a regular current account.
It's essential to understand the terms of this transition and how it will affect your finances. Specifically, look at what will happen to your overdraft, and if any fees will be applied.
If you’re not happy with the account, you could switch to a top graduate account, or even a standard current account, at this point.
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.
