What happens when I graduate?
You will be free to cancel your student account and switch to a conventional current account with the same, or a different provider at any point. You won’t be tied in any way to your student account after you’ve graduated.
At this stage, the biggest thing you should consider is your overdraft and, in particular, when the interest kicks in.
Who can open a student account?
Contrary to what you might think, student accounts aren’t just for undergraduates entering university. Different banks will have slightly different requirements, but in general, if you're studying full-time, either for a degree or equivalent, or for any postgraduate course, you'll be able to open a student current account.
Some banks will accept applicants enrolled in various non-degree study programs. If you’re unsure in any way about whether or not you’ll qualify, the best thing to do is simply get in touch with the bank you want to use, and they’ll let you know.
Advantages of student accounts
There are various aspects of student current accounts designed to suit the particular needs of students in the UK. We’ll go over some of the key benefits of these specialised accounts in this section:
Interest free overdraft facilities
One of the biggest attractions of student accounts is the optional interest-free overdraft facility.
This can be very helpful for students who don’t have time to work and are relying solely on a maintenance loan to fund themselves.
Generally, the amount you can be overdrawn without paying interest increases each year, sometimes up to a maximum of £3,000. This increase may happen automatically, or you may need to visit a branch to request it.
While an overdraft is helpful in the short term, it's important to be careful. You will have to pay it back, so don't consider it free money.
Generally, the overdraft associated with your student account remains interest-free for up to a year after you finish your course, but each bank may have a slightly different policy. You should start putting money aside to pay off your overdraft as soon as you start working so that you don’t get stung by interest rates in the future.
Freebies and perks
Another factor that makes student accounts more attractive is the variety of free benefits that are often bundled with them.
From railcards to gadgets, many banks offer free extras to those opening student current accounts. The perks you're offered, if any, will vary from bank to bank, so compare accounts to see what benefits you could enjoy.
Financial advice
Banks know that those entering university are often about to take full financial responsibility for the first time. As such, they are usually eager to offer financial advice to those opening student accounts.
Picking the right student account
There are a wide range of student accounts available in the UK, and choosing the right one is simply a matter of working out what you value most when it comes to banking.
If you want to spend a bit more each year, then choosing an account with the largest interest-free overdraft is best.
If you think you’ll be able to manage without the biggest overdraft, but you do think you’ll be travelling up and down the country often, then a bank that bundles a railcard in with their student account will be the one you should do business with.
If you want the peace of mind that comes with readily available financial advice, choose a bank with a branch on your campus.
Whatever you're after, compare student accounts with Money Expert to see what benefits you could enjoy.
Student credit cards
Some banks offer student credit cards with their accounts. These can be a good idea if used responsibly, but as with an overdraft. you should always be cautious when spending money you don't have.
Unlike the overdraft facilities offered, a student credit card won't be interest-free. So, you'll want to make sure that each month, you have enough money to pay off as much of the balance as possible.