Student Bank Accounts Become More Competitive | moneyfacts.co.uk

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Derin Clark

Derin Clark

Online Reporter
Published: 02/08/2021

With just over a week until A level results day, many will be preparing for their first year at university, but amongst the excitement of becoming a fresher, new students should also consider sorting out their finances by opening a student bank account.

Many high street banks and building societies, including Nationwide Building Society, Halifax and Barclays Bank, have student bank accounts that are specifically designed with the needs of students in mind. As such, many of these accounts come with incentives and features that are specifically aimed at helping students deal with financial and lifestyle aspects of being a student. For example, many accounts offer 0% interest on overdrafts and others include benefits such as cashback – all the accounts can be compared on our student bank account comparison chart.

Commenting on the student accounts available this year, Rachel Springall, finance expert at Moneyfacts.co.uk, said: “Student account providers have not held back with tweaking perks this year, which are enticing and could save students some cash. Unlike last year, two banks are offering a free cash incentive upon opening, namely HSBC with £80 and NatWest with £50, which was unheard of in 2020 for student accounts. Since the last academic year there is a better variety of perks, so students can debate which type of account will give them the most value based on their spending habits.

“Those looking to save some cash on study materials will find Barclays offering an online library with Perlego which would usually cost £96 a year, plus the bank continues to offer an attractive interest-free overdraft of up to £3,000. Fundamentally, a competitive overdraft may be a key factor for some students and there are other alternatives to consider. Nationwide Building Society would be a cheaper alternative for students looking to travel abroad as it does not charge for overseas use and offers a £3,000 interest-free overdraft. Elsewhere, HSBC offers an interest-free £3,000 overdraft tariff and along with the new £80 cashback for this year, it will also allow students to choose either an Uber Eats voucher worth £20 or a year of unlimited next-day delivery with ASOS Premier which is worth £9.95 a year.

“Students who expect to travel across the UK during their years of study will find NatWest has not extended its Coach Card add-on, which was worth £12.50 year, but Santander still has its lucrative Railcard on offer which is worth £30 over one year. Compared to Santander, NatWest is offering a more generous overdraft within the first few years of study and it also offers a tastecard for free which is worth £34.99 a year.

“The pandemic’s impact may have caused some anxiety amongst prospective students who are preparing to live away from home for the first time in their lives. If they have money concerns, they would be wise to speak with their family and friends for advice in the first instance, but also take some time to find a decent student account to stand by them during their years of study. Taking advantage of free mobile apps to budget and keep an eye on expenses on the go, such as with Moneydashboard, is also wise. There are undoubtedly some decent account perks this year, but students must check the overall package before they commit.”

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