Everybody is feeling the pinch and students want to be sure that their future is funded. Sometimes, student finance isn’t enough to ease those worries. Getting a student bank account and ensuring you get the best savings is a step towards achieving that.
We all want to be making the most of our money and making sure we’re covered for the future. Sticking your notes under the mattress or filling a glass bottle with spare change isn’t going to give you the best bonuses. To get the best out of your savings, you’ll want a savings account with the best interest rates. First of all, you’ll need to open a student bank account.
A Student Bank Account
A student bank account is very similar to a normal one, just there are usually some more perks. The big one for instance is an interest-free overdraft. We’ve all been there when your student finance or part-time job just isn’t going to cover the food shop or a night out. So, it’s always reassuring to know you’ve got some backup money that won’t cost you any extra.
Bank accounts sometimes offer one-off perks as well. But be warned — the one-off perks don’t win over overdraft size. You won’t be thanking your free Railcard when you’ve got no money for a ticket.
What Do I Need To Open A Bank Account?
As with opening any bank account, you will need a form of ID and proof of address. A student account also required proof of your place in a university. This could be your unconditional offer, your acceptance letter or your A-level results as well as your conditional offer. It’s best to check with your chosen bank about what they specifically require.
It’s also worth noting that overdrafts can only be offered to those 18 and above. Some people, particularly if you’re in Scotland, start university when they’re 17. Banks such as Lloyds, TSB, Bank of Scotland, RBS and Natwest will all allow you to open a student bank account at 17 — but they won’t give you an overdraft.
The Top Student Bank Accounts
The Times list the following as the best bank accounts for students.
- Nationwide FlexStudent – Best allrounder
Nationwide offer interest-free overdrafts starting at £1000 in your first year and increases to £3000 in your third year. But don’t worry, there’s no rush to pay it back. The back has a tiered overdraft repayment scheme for three years after your course finishes. Plus they let you get organised early and understand if you’ve been swept off your feet with it all. You can open up a bank account 5 months before or 12 months after the course starts.
Although they don’t offer any additional perks, they have everything else covered and more.
- Santander 1-2-3 Student Account – Best for perks
Not only does Santander offer a guaranteed overdraft of £1500 every year for full-time students, but they offer a free four-year 16-25 Railcard and up to 15% cash back with some big brands such as Costa.
Also, if you do a four or five-year course then your overdraft amount increases to £1800 and £2000 respectively.
- Barclay Student Additions Account – Best of the rest of the high street
With Barclays, you don’t need to visit a branch to open your account. Simply enter all the information on the app with a selfie and you’re ready to go. Although they offer a free 12-month subscription to Perlego, their overdraft doesn’t match up to the others.
- HSBC Student Bank Account – Best for overdrafts
HSBC offers an interest-free overdraft of £1000 in your first year which rises to £3000 in your third. What sets them apart is that this continues after your graduate. In the first year after you graduate, you can still have an interest-free overdraft of up to £3000, which reduces to £2000 in the second year after graduating.
The app also has lots of budgeting tools and you can get a £100 signup bonus.
The Best Savings Accounts For Students
Now you’ve set up a bank account, you need to think about your savings too. You need to figure out what kind of saver you are so you can open the right kind of savings account for you. Can you deposit a set amount each month, or do you need to be able to dip in and out whenever you need?
The Different Types Of Student Account
- Easy access savings accounts: These allow you to withdraw cash whenever you need but that typically means a lower interest rate.
- Fixed-rate savings account: These tend to have a better interest rate but you’ll need to leave the money in them alone for possibly up to 5 years. They often require a higher deposit amount and withdrawing money results in losing your interest rate.
- Current accounts: Current accounts sometimes come with a savings account in the package. This could be a Cash ISA which lets you deposit £20,000 a year tax-free. Another option is a Lifetime ISA which can give you £1000 in free money if you use the account to buy your first house.
The crux of the decision is whether you’ll need to access the money or if you want the interest to build up.
The Best Easy Access Savings Accounts
Save The Student lists the following as the best accounts if you’ll need the cash to hand.
They have an interest rate of 2.55 per cent and an unlimited amount of withdrawals. There’s no minimum deposit to set up and you can even apply through the app.
Also with a 2.55 per cent interest rate, they’re as easy to access and set up as the Atom account.
The Best Fixed-Rate Savings Accounts
These are the recommended accounts if you can resist touching your money.
This has an interest rate of 4.25% and only requires you to leave it alone for a year. The minimum deposit is only £1, with interest paid at maturity.
An extra year means a bigger interest rate. This offers a 4.6% interest rate which is paid annually. The same with the one above, you only need £1 to open the account.
For both of these, you can apply through the app.
Opening a savings account is a personal and individual decision. You need it to cater to your needs whilst still helping with your future. With all these options for the best savings account for students, hopefully, there is one that suits you.