Students are treated like VIPs by banks; they all really want you to bank with them.

This is fantastic as it puts the power in your hands to choose the best one, but how do you decide?

1. Think about what you need

Firstly, you need to decide what you’ll likely to want from your bank account.

Do you have a monthly income coming in and you need the best interest rate and to earn cashback on your purchases or do you need a large overdraft for your living expenses?

This is why it's important to explore all your options offered by various banks, in case there's one out there that matches your requirements exactly.

2. Look at the interest free overdrafts

Nearly all UK banks offer interest free student overdrafts, so even if don’t need one to start with, it’s worth applying as soon as you can so you have it in reserve if you need to.

Check if the bank is offering a guaranteed overdraft amount or ‘up to’ that amount. If ‘up to’ be aware that you may not receive the maximum amount (usually £3,000) as this will depend on your credit score (existing store cards, previous loans, bill payments, being on the electoral register, etc. will impact your score).

If you can it’s advisable to apply for the one with the largest guaranteed interest free amount.

If you want to be extra savvy, draw out your interest free overdraft funds and put them in a savings account earning interest or even a high interest paying current account until you need them.

Please make sure you know exactly when the interest free period will end and you have plans in place to repay as once you graduate, fees and interest will start to amass quite quickly.

3. Find out the repayment conditions

You probably won't have to repay your overdraft until after you graduate, but the sudden demand for £3,000 might be rather a shoock if you're not prepared for it.

This is why it's essential to plan ahead, which starts with understanding the conditions of your loan.

Most banks automatically turn your student account into a graduate bank account which sorts out repaying your overdraft over a certain period of time.

4. Check out the freebies

Free railcards, free software, free notebooks, free cashback, free gifts - they are all there to tempt you into choosing a particular bank.

However, any great offers should always be a secondary reason below the interest free overdraft and the facilities the account offers because over time, these will give you more valuable financial benefits.

5. Ensure easy access to your money

It is actually quite important that your student account comes with as many ways to access your account as you can: debit card, online banking, mobile app access, ATM withdrawals and telephone banking to name just a few.

And don’t forget how handy contactless payments can be when you’re in a rush! The current limit for this is £30, which is useful for grocery shops, nights out, etc.

Hopefully you won’t need to but if your finances change while you’re a student and you need help, having a branch either on campus or very local to your university is vital for a face to face chat with a dedicated student adviser.

6. Meet the qualifying requirements

If you’re a UK student studying full-time for an undergraduate or postgraduate degree or equivalent, you will qualify for student banking in the UK.

If you’re studying part-time some banks, but not all, will still offer you student banking. You’ll need to check with the individual bank to see what they're offering students.

7. Read the fine print

Research shows that the vast majority of us are loyal and stay with the bank we choose when we first set one up.

With students becoming graduates and predicted to earn higher than average salaries, banks are crying out to help you but do be aware of the small print.

Great comparison sites are MoneySavingExpert, SavetheStudent and Money (recommended by UCAS).

Studential’s tips on student bank accounts also offers comprehensive advice.  

8. Be wary of credit and store cards

Although useful in a difficult situation, you risk being charged interest which can quickly add up.
 
If you have to use them, make sure you can pay them off at the end of the month so you don't rack up any debts.
 

9. Check your overdraft limit

When these aren't interest-free they offer an amount of money you can borrow at a set level of interest. If you go over that limit the extra charges can be extortionate!

The advertised student 0% interest overdraft is often the maximum they offer (hence the "up to" wording).

For many banks, this amount is only available in your final year at university and only to students with a decent credit rating.

10. Know your credit score

Student account overdrafts are a form of borrowing, so you'll be credit scored when applying.

The quality of your score can determine how much overdraft you'll be offered. You can raise your chances of approval by knowing your own credit score and taking steps to improve it.

Start by getting a free credit score from Experian, the largest agency used by banks.

What do I need to open a student bank account?

Usually, not very much! You will need:

  • One or two forms of photo ID such as a passport or driver's licence
  • Proof of address such as a recent utility bill or bank statement
  • Proof of student status, which can either be a letter of acceptance from your university, or UCAS offer letter.

Most banks now allow you to apply online for a student bank account, but you will still have to send off supporting documents or take them into your local branch. Documents must be original copies, not photocopies.

Once you've opened a new account, be sure to update Student Finance of your new bank account details, which you can now do online.

Some of the best student bank accounts for 2020 include:

Further information

For more tips and advice on applying for a student bank account, please see: