This month, hundreds of thousands of students across the UK will receive some life-changing news that will determine where they spend the next few years of their lives.
However, amid all the celebrations, as sixth-formers find out if they got into their first-choice university, and the (hopefully temporary) sorrows, as those whose exams did not go to plan scramble for a place through clearing, there are some important financial matters to think about.
One of these is sorting out a student bank account.
If you are heading to university, this account will be your constant companion over the next few years, so it is vital to pick one that works well for you.
Many people select a student bank account after the A-level or Scottish highers results day, when they know where they are going. In England, Wales and Northern Ireland, results day is 14 August, while in Scotland it is this coming Tuesday (5 August).
At this time of year, high street banks and building societies dangle various tempting goodies in front of young people, knowing full well that some will stay on as customers for years – or even decades – after they have finished their studies and entered the world of work.
However, for many, the most-important feature will be the size of the interest-free overdraft on offer.
You are not required to have a student bank account – you could opt for a standard current account. However, those aimed at university-goers typically offer features you cannot get elsewhere.
“Students may be enticed by the free perks, but it is essential they compare the whole bundle alongside the 0% overdraft in the first instance,” says Rachel Springall, a finance expert at the website Moneyfactscompare.co.uk.
Interestingly, this year Martin Lewis’s MoneySavingExpert.com and the Save the Student website have chosen the same providers when it comes to their top four student accounts: Santander, NatWest and its Royal Bank of Scotland (RBS) brand, and Nationwide.
Once again, NatWest and RBS have been highlighted as the banks offering the most generous interest-free overdraft deals – up to £3,250 in the third year of study. That’s assuming you are eligible for that amount.
Santander is not as generous but it scores highly. That is partly because, with most banks, the quoted overdraft amounts are “up to” and may only be available in your final year at university or only to those with a decent credit rating, whereas with Santander you are guaranteed the full £1,500 in years one to three, provided you meet the basic criteria, explains the Save the Student money advice website. Santander’s free four-year young person’s railcard is also a big draw.
Here we look at the perks and interest-free overdrafts on offer from the main players.
NatWest and RBS
The freebies: £85 cashback (although down from £100 last year) and a free tastecard, valid for four years and offering two-for-one meals out and other dining discounts. NatWest and RBS say the tastecard is worth £79.99 a year, although at the time of writing, annual membership was available for £29.99.
Interest-free overdraft: up to £2,000 from year one (limited to £500 in your first term). Up to £3,250 from year three onwards.
Anything else? NatWest and RBS again came top in Save the Student’s banking survey earlier this year, with student satisfaction scores of 4.34 and 4.32, respectively, out of five.
Santander
The freebies: the Edge student account comes with a free four-year 16-25 railcard that the bank says is worth £115, offering students up to a third off most rail fares. There’s a prize draw for those who open, or transfer to, the account before 17 October this year, with prizes ranging from £20 to £100,000. Also, you can pay into a regular savings account paying 5%, and get access to cashback and offers via the bank’s Santander Boosts rewards programme.
Interest-free overdraft: £1,500 for the first three years, provided you meet the basic criteria (registering for online banking and paying in a certain amount). This can increase to £1,800 in year four and £2,000 in year five if students continue with their studies.
Anything else? Santander was once again the most commonly used bank among those surveyed by Save the Student, although its market share has dropped slightly to 18% from 21% last year. “Even when I was at university, Santander were very popular,” says Tom Allingham, the communications director at Save the Student. “They definitely make a conscious effort in that space.” However, in terms of overdrafts, NatWest and RBS “are offering more than £1,000 more at the maximum level”, he adds.
Nationwide
The freebies: the building society offers £100 cashback and £120 worth of Just Eat vouchers, paid out as £10 a month over the first year.
Interest-free overdraft: provided you meet the basic criteria, you are guaranteed a £1,000 0% overdraft in year one. It is then up to £2,000 in year two, and up to £3,000 in year three (and beyond, if applicable).
Anything else? If you have, or open, a savings account with Nationwide as well, you could get an annual Fairer Share scheme payment. For the last three years running it has paid out £100 to eligible members. Some students will like the fact that Nationwide is a mutual (owned by its members rather than shareholders), gives 1% of its profits to charities, and has made a pledge to keep branches.
Lloyds Bank
The freebies: £100 cashback (down from £110 last year), plus £90 in Deliveroo vouchers (£15 a month for six months) provided they make a minimum number of transactions.
Interest-free overdraft: up to £1,500 in years one to three, and then up to £2,000 in years four to six (if applicable).
Anything else? With Lloyds’s Everyday Offers scheme, students can earn up to 15% cashback at selected retailers. If they sign up to Deliveroo Students at the start of term, they will pay no delivery charges with Deliveroo Plus Silver on takeaway orders above £15 (restaurants) or £25 (grocery and retail shops).
HSBC
The freebies: no major freebies for new student account customers at the time of writing.
Interest-free overdraft: up to £1,000 when you open the account. You can ask for an increase to up to £2,000 in year two and up to £3,000 in year three.
Anything else? Students can access the bank’s home&Away scheme, which offers discounts on matters such as shopping, dining and travel. They are also able to put money into an HSBC regular savings account paying 5%.
Barclays
The freebies: no major freebies on offer at the time of writing.
Interest-free overdraft: up to £1,000 in year one (up to £500 during the first term), then up to £1,500 in year two and beyond.
Anything else? Barclays has been the subject of demonstrations by anti-war activists and others. It has been criticised by some for providing financial services to defence companies supplying Israel. It says: “Barclays provides a range of financial products and services to UK, US and European defence companies that supply Nato and its allies … Barclays does not directly invest in these companies.”
Halifax and Bank of Scotland
The freebies: £100 cashback (down from £110 last year), plus £90 in Deliveroo vouchers (£15 a month for six months) provided they make a minimum number of transactions.
Interest-free overdraft: up to £1,500 in years one to three, and then up to £2,000 in years four to six (if applicable).
Anything else? With Halifax’s Cashback Extras and Bank of Scotland’s Everyday Offers, students can earn up to 15% cashback at retailers including Costa Coffee, Just Eat and Sainsbury’s.
TSB
The freebies: no major freebies on offer at the time of writing.
Interest-free overdraft: £500 in the first six months, rising to £1,000 in months seven to nine, and up to £1,500 from month 10.
Anything else? Students can earn 5% interest on account balances up to £500. They can access offers and discounts via the bank’s My Rewards portal.
‘I was sold on the free four-year 16-25 railcard’
As a student there will be many mornings where you stare lamentably at your bank balance. So you might as well pick an account that can offer some respite. In my case it was the Santander Edge student current account.
I was sold on the free four-year 16-25 railcard. Throughout each year at university my railcard has come up trumps in a variety of ways. In my first year at university, it made home feel just that little bit closer. With a 33% saving on each fare, I was constantly spotted on platform 1 with a big bag of laundry. In my second year, my railcard served as a gateway to explore more of the country. I’ve ticked off new sporting venues, as well as Bristol and Stansted airports. Moving into my final year, as the crunch begins, my railcard will act as an enabler to complete valuable internships and work experience.
My account also comes with a 0% overdraft, which is a reassuring presence should any part of university life catch up with me.
There were a variety of options that didn’t quite capture my eye. NatWest offered a tastecard letting you take advantage of restaurant deals and food discounts. In my case I found that after the first semester, the likelihood of eating out quickly diminishes. Student finance only stretches so far!
Other accounts offered cashback at certain retailers, which, considering my limited record of high street spending, would have been wasted on me.
Talking of the high street, the fact that there’s a Santander branch in my university town was also a factor. My family is still wedded to the chequebook, so a place to deposit cheques, even in 2025, is greatly appreciated.
Alfie Howlett is studying a three-year BA journalism degree at the University of Gloucestershire