Abbey is launching two new student accounts this month, one of which is aimed at international students.
According to the bank, those coming to study in the UK often have difficulty opening an account, so its product is designed to make the process simpler and pays an interest rate of 6 per cent on a balance up to £500.
Meanwhile domestic students can benefit from a 4 per cent rate, with a £50 cash incentive on the account’s opening.
The account’s interest free overdraft gradually increases from £1,000 in the first year to £1,500 in year three and to £2,000 for those studying for five years.
“Key to successful financial planning at university is making sure your money, when you have it, is working for you and also that your debts are not costing you too much,” said director of Abbey Banking Steve Shore.
Last week Lloyds TSB found that 27 per cent of students starting university this year intend to live with their parents due to financial worries.
© Adfero Ltd