Once you’ve got an unconditional offer for a university course, or you’ve earned the grades for a conditional one, you can apply for a student bank account. You may already have a current account, but once you’re a student you’ll have new financial priorities and different needs.
It’s not easy to pick a student bank account, as they all seem pretty similar and it’s likely to be your first major financial decision, but this guide should demystify the process and take away some of the stress, so you can concentrate on finishing school and, equally importantly, celebrating your freedom and the next big step!

Freebies aren’t everything – honestly

There will be plenty of time for nabbing free stuff at the Freshers’ Fair, when you’ll be showered with stationery, squeezy stress balls, and pizza, but when you’re choosing your bank account, don’t let perks seduce you. That free rail-card or quick shot of cash won’t be worth it when you’re struggling to extend your overdraft or find that your bank’s not as flexible as you need it to be.
And if it is free stuff you’re after, check out student websites like Student Money Saver and Student Beans, which are updated daily with the latest deals and freebies and can send them straight to your inbox.

Bank on campus

One of the most alluring features of a bank (yes, they do have alluring features) is that they might have a branch right on campus, so you can pop in and see them with next to no effort. Choosing your account based on this would be a mistake, as most of the things you need a bank branch for you can do online anyway, and you can withdraw cash for free at almost any ATM, not just your bank’s. If you ever need to go into the branch, that trip into town is cheaper than having the wrong bank account, and you can combine it with some shopping while you’re at it…

Look for an interest-free overdraft

Most students need an overdraft, as your loan might not stretch across the whole term, and independent living can get pretty expensive. The main feature that makes student accounts different from regular current accounts is that nearly all student accounts charge no interest on your overdraft, so you can borrow without paying anything extra. Consider choosing the account with the biggest overdraft possible, so you’re as covered as you can be, and check the penalties for exceeding it, and the potential for extensions.
If you’re lucky enough not to need an overdraft, it might be worth taking on a student account anyway and dropping the money into an ISA for tax-free savings.

Be wary of credit

Your overdraft is ideal if you need money, but when you sign up for a student current account or visit your branch for any reason, the bank may try and persuade you to register for a credit card, too. You shouldn’t need one at this stage, and if you’re not careful you could end up with debt you can’t yet get rid of, made worse by interest charges.
If you do get yourself in a sticky situation, get in touch with debt charity StepChange, or The Money Charity for advice.

Don’t stick with your old bank

Loyalty really doesn’t pay when it comes to banks. It may seem easier just to convert your current account into your bank’s student version, but this could cost you down the line if it won’t meet your needs. Ditto your parents’ bank, if it’s different to yours; there’s no advantage to staying with the family favourite. Here’s a great student bank account guide to help you compare the various student accounts on offer, so you can make an informed decision – check back for the updated version a little later in the year.

There you have it: keep these key factors in mind and compare the bank accounts on offer, and you’ll be sorted when it comes to the first step in student finance. If you’re still a bit stuck, the Money Advice Service is really helpful and they have comprehensive guide here which can help you make the most of your account.

(Featured image credit: Piggybank with a trim vector taken from Freepik.com. Used under the Creative Commons Licence.)