So which student bank account should you use? First of all, let's look at the best way to treat a student bank account and all it's perks! Look for the biggest 0% overdraft out there, but remember do not go over the limit or you will face big charges. Also be careful to look for guaranteed overdraft limits over 'up to' limits which may not meet expectations. Don't pick an account just because you live near a local branch or near an ATM, most people are rarely required to go in to the branch in person (with great on-line access offered by all banks) and cash is free to withdraw at most ATM's. Once uni is over, switch to a top-notch graduate account instead. For around a year after graduation, you will be eligible for preferential perks.
Santander
Santander will offer you an overdraft of UP TO £1,500 and 1% in-credit interest. They will also throw in a 4 year rail card (worth £120 and gives you a 1/3 off most train journeys) which is a massive bonus! You need to pay £500/term in to qualify. You get the rail card valid for 4 years, within 3 weeks of opening your account, so even if you end up switching then this is a valuable freebie! The overdraft remains capped at £1500 for the whole 3 years, and unarranged overdraft fee's are £5 a day, capped at £10 a month. Paid/unpaid fees of £5 and £10 per item apply.
Co-op
The Co-operative Bank offers an impressive £2000 overdraft. £1400 in first year, £1700 in second year and £2000 in third year. They also have a good reputation of offering some of the greatest customer service in the industry, which is always a bonus if you need to contact them. The bank state that 90% of applicants are successful in being offered the full overdraft amount (which is higher than other banks) as long as account holders maintain a good financial record. No interest is offered for being in-credit and there is an 18.9% EAR charge for unarranged overdraft, plus £15 unpaid item fee (capped at £150 a quarter).
Halifax
One of the biggest interest-free overdrafts on offer, UP TO £3000 but this is assessed case-by-case so may be lower. The first £1000 is a guaranteed overdraft though! If you go over your limit, you are looking at a charge at 24.2% AER plus a monthly fee of £28. Returned/unpaid item fee is £10. 0.1% AER interest offered for being in-credit.
HSBC
Another whopping interest-free £3000 overdraft on offer here, but this is only guaranteed at £500 and very likely to be less than this amount. The interest on offer for being in-credit is a reasonable 2% and unpaid fee's stand at £25. No freebie on offer here either, unlike a few other banks below.
RBS
RBS offer a shopping discount card and Tastecard membership with their account and the £1000 interest-free overdraft, rising to £1500 in the third year, is generous enough.
Barclays
A £2000 interest-free overdraft from the start is more than enticing, and 10% discount on travel insurance for those student holidays in Ibiza and Marbella.
Lloyds
Lloyds will offer a free NUS Extra card for 3 years which is worth £12 a year and will get you a generous discount in many shops. Alongside an interest-free overdraft of £1500, this is definitely worth considering.
It's a difficult choice to make, and you need to weigh up the best pro's for you. However, in my opinion, the Santander account's free 4 year rail card (worth £120 in it's own right will save you countless £££££ on rail journeys to see your friends and family over the 4 years) will save you a hell of a lot more. An awesome freebie, and a decent interest-free overdraft, are more than enough to make this top the list!
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