Student accounts for 2013

So you've got the A-level results you wanted and you're off to university. The next decision you'll need to make is which student account to go for.

The past few weeks have seen a number of banks and building societies launch student accounts on to the market, all of them slightly different. So, to help make your decision that bit easier, here's a breakdown of what's on offer…

RBS and NatWest Student Account

Incentive for applying: The NatWest and RBS student accounts come with a free Tastecard membership, worth £79.95 a year, which gives you discounts off meals at thousands of restaurants such as Pizza Express, Prezzo, La Tasca and TigerTiger. This is valid for as long as you hold the account.

Overdraft: You'll be given a tiered interest-free overdraft as follows:

• Term 1: up to £500
• Term 2: up to £750
• Term 3: up to £1,000
• Year 2: up to £1,250
• Year 3: up to £1,500
• Year 4: up to £1,750
• Year 5: up to £2,000

To qualify for the interest-free overdraft, you will need to pay at least £750 into your account every six months and make at least three debit transactions every month.

Other benefits: You'll have access to mobile banking and can sign up for text alerts to help you manage your money. You'll also be able to take advantage of the emergency cash service which ensures that if you lose your debit card, you'll still be able to access up to £300 of your cash, providing you have at least £25 in your account.

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Halifax Student Account

Incentive for applying: There are no special incentives for applying for the Halifax student account, although you will have the option of uploading your favourite photo onto your debit card!

Overdraft: You'll be given an interest-free overdraft of up to £3,000, with the first £1,000 being guaranteed. This is valid for up to five years of study, plus an extra year after you graduate.

Other benefits: You'll receive commission-free foreign currency and traveller's cheques which could be handy if your budget ever stretches to a holiday abroad. You'll also have access to mobile banking and can register for text alerts so that you know when you're getting close to your overdraft limit.

Santander Student Account

Incentive for applying: The Santander student account offers a 16-25 Railcard absolutely free for four years (usual price £30 per year), giving you an instant saving of £120. Your Railcard will save you a third on most rail fares, which works out to be an average saving of £174 a year, according to the Association of Train Operating Companies.

Overdraft: The Santander student account comes with an interest-free overdraft as follows:

• Years 1, 2 & 3: £1,500
• Year 4: £1,800
• Year 5: £2,000

However, this is providing you credit your account with £500 or more each term, otherwise your overdraft limit will be £250.

Other benefits: You'll earn an annual equivalent rate (AER) of 1.00% on balances up to £500 (no interest is paid on any amount over £500). You'll also have access to mobile banking and be able to set up text and email alerts, to tell you when your balance is getting low and when you've been given a cash injection.

Lloyds TSB Student Account

Incentive for applying: With the Lloyds TSB student account you will receive a free NUS extra card for three years, worth £32. The card provides discounts and offers for more than 160 brands and retailers, including Apple, Amazon, Alton Towers and McDonalds.
 
In addition, you'll receive a £75 discount off a holiday booking with STA Travel, should you decide to jet off somewhere, with no minimum spend required.

However, to qualify for these offers you must apply for your account before October 31.

Overdraft: The account comes with an interest and fee-free overdraft as follows:

• Months one to six: £500
• Months seven to nine: £1,000
• Months 10 to 12: up to £1,500
• Years 2 & 3: up to £1,500
• Years 4, 5 & 6: up to £2,000

Other benefits: If you have a savings account with Lloyds TSB, you will also be able to take advantage of the bank's Save the Change scheme. Every time you spend on your Lloyds TSB debit card, providing you are in credit, the amount will be rounded up to the nearest pound and transferred to your Lloyds savings account.

The Lloyds Mobile Banking App will also allow you to view your balance, pay bills and transfer money between accounts. Or you can log on to mobile banking.

HSBC Student Account

Incentive for applying: With the HSBC student account, you'll receive free music downloads - up to 18 albums from Sony music over three years. You'll also have access to HSBC's Student Exclusives website which provides offers and discounts from places such as Officers Club and Bloom FM music streaming.

What's more, the HSBC Student Bursary competition gives 10 students the chance to win a bursary of £10,000 each. All you need to do is upload six photos or a 90 second video on to Facebook with an application form that answers the question: "How would £10,000 help you enhance your potential?" The competition deadline is September 12.

Overdraft: You'll have access to an interest-free overdraft of up to £3,000 over the course of your studies, with the first £500 being guaranteed when you open the account.

Other benefits: You'll earn an AER of 2.00% on balances up to £1,000 in your first year. You will also receive overdraft limit alerts at HSBC cash machines and have access to mobile banking and the FastBalance app which enables you to view your balance.

Barclays Student Additions Account

Incentive for applying: There are no special incentives for applying for the Barclays account, but you will receive a 10% discount on student travel insurance until 30 June 2014.

Overdraft: You will receive an interest-free overdraft up to £2,000, but you will also be able to extend this to £3,000 providing you are prepared to pay an interest rate of 8.9%.

Other benefits: You'll have access to free text alerts to help you manage your money and be able to use mobile banking. In addition, you can send and receive money quickly using your mobile phone with Barclays Pingit. You can send up to £750 a day.

Which account should you choose?

When deciding which account to plump for, try not to be too swayed by incentives such as a free discount card or money off travel insurance.

Of far more importance is whether or not you will have an interest-free overdraft and how large this overdraft will be. Although you might instinctively want to select the account with the largest overdraft from the outset, bear in mind that tiered structures can help you to budget better.

You should therefore compare what's on offer carefully to ensure you’re choosing the current account that's right for you.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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