Various student packages have been put together by banks to help students manage their money, but it is important to shop around to find the right account to suit your needs.
Although some come with tempting freebies, the interest-free overdraft is likely to be the most important feature of any student account - but some are much more generous than others.
Remember, however, that although a large overdraft limit may be appealing now, it will have to be paid back eventually.
Here, we take a look at what the big banks are offering students starting university this autumn…
Lloyds TSB Student Account
This account offers an interest-free overdraft of up to £1,500 in the first year, allowing students to go overdrawn by up to £500 interest-free in the first six months and then allowing them a further £1,000 in months seven to nine.
The interest-free overdraft is then £1,500 in years two and three, rising to £2,000 in years four and five for students on longer degree courses.
A free, mobile banking service is another feature of the account which can help students keep control of their finances while trying to juggle a hectic social life, studying and irregular hours.
Students can choose to receive weekly balance and limit alerts so they will always know where they are up to and allows them to plan ahead if they receive a warning that they are about to exceed their overdraft limit.
The Barclays Student Additions current account
Barclays’ Student Account provides an interest-free overdraft of £2,000 every year of your degree course. It also offers mobile banking with students having the option to design their own personal package choosing which information they wish to receive.
For students who are constantly on the move, this service enables them to always keep on top of their finances.
Another feature of this account is that students will receive a contactless debit card to make transactions of £15 or less easier and faster. The card is simply held near a reader and the payment made, meaning that cash doesn’t need to be carried around.
In terms of freebies, the account comes with cashback worth up to £75 of on mobile phone packages, plus a 20% discount on travel insurance.
HSBC Student Account
HSBC is one of the most generous student accounts when it comes to interest-free overdrafts, offering up to £3,000 every year of your degree course.
Unusually the account also caters for those who don’t plan to go overdrawn, offering 2% annual interest before on balances up to £1,000 held in the account in the first year.
It also comes with two years’ worldwide travel insurance for first year students which would be useful if the course includes a short-term placement abroad or for students just planning to see a bit of the world in the holidays.
Santander Student Account
Santander offers one of the smallest interest-free overdraft facilities, but if you don’t want to end up saddled in debt then this could still be the account for you.
The account offers £1,000 interest-free in year one, £1,250 in year two, £1,500 in year three, rising to £1,800 and then £2,000 in years four and five.
One of the features of the Santander Student Account is that it comes with mobile, gadget and laptop insurance. Students can also earn 1% annual interest on any savings if they manage to stay in the red, but this is only payable on balances up to £500.
Halifax Student Account
Halifax, like HSBC, offers students an interest-free overdraft of up to £3,000 for every year of their degree course.
It also offers 25% off AA breakdown cover as well as commission-free currency, which is likely to come in handy for regular travellers.
NatWest Student Account
NatWest, like Santander, offers an interest-free overdraft up to £1,000 in year one. You can go overdrawn interest-free by up to £500 in the first term, £750 in the second term and £1,000 in the third term. In the second, third, fourth and fifth years, the interest-free overdraft rises to £1,250, £1,500, £1,750 and £2,000 respectively.
The account offers up to £100 off selected ASUS laptops as well as a Student Discount card, which entitles you to money off at places like Game and STA Travel.
One of the biggest perks of the NatWest Student Account used to be the offer of a free five year 16-25 Railcard entitling you to a third off rail travel costs, but this is now only available to people with a NatWest Adapt account who then upgrade to the student account.
HSBC and Halifax offer the most generous interest-free overdrafts for students, allowing them to borrow up to £3,000 each year of their degree.
Steep living costs mean that unfortunately using an overdraft is inevitable for the vast majority of students, but you should think carefully about whether opting for the account which offers the biggest overdraft could tempt you to spend more than you otherwise might.
If you think that this might be the case, then you may be better off choosing an account with lower interest-free overdraft limits – but make sure you don’t exceed them as you could face painful unauthorised overdraft charges.
Please note: Any rates or deals mentioned in this article were available at the time of writing.