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If you are about to start a course at a university or college in the UK, you will need to open a student bank account. There are many student accounts available and some may suit your individual circumstances better than others. Here is a comparison of three accounts that have received good independent ratings. The Co-Operative Bank’s Student Account The Co-Operative Bank’s Student Account was rated the best student bank account of 2012/2013 by the website, savethestudent.org. It also had the second highest customer score of 73 per cent in research carried out by the consumer organisation, Which? This score is based on overall customer satisfaction and the likelihood of recommending the bank to other people. According to savethestudent.org, the best feature of this account is that you are guaranteed an interest-free overdraft of £1,400 in your first year. The only conditions are that you have to be at least eighteen years old and you need to deposit £300 in your account. The interest-free overdraft increases to £2,000 in your third year. Although this is a generous offer, you may be able to obtain a higher interest-free overdraft at other banks if you have a very good or excellent credit rating. After you graduate, you will have one year to pay off your interest-free overdraft. At present, the Co-Operative Bank does not offer a graduate account, so you will either have to transfer to an alternative account at the same bank or switch to a graduate account at another bank. The Co-Operative Bank is well known for its ethical attitude towards investments. So, if this is important to you, it may give you an additional reason for choosing the Co-Operative Bank. The Halifax Student Current Account The Halifax Student Current Account was rated second-best by savethestudent.org. It received the fifth highest customer satisfaction score of 61 per cent in the Which? research. This account offers an interest-free overdraft of up to £3,000. However, this amount is not guaranteed and, according to savethestudent.org, some students have found it difficult to receive the maximum amount. The exact amount of your interest-free overdraft will depend upon your credit rating, your personal circumstances and whether you pay in money regularly. The Halifax account also offers students zero commission on traveller’s cheques and foreign currency. This may be an attractive proposition if you plan to travel abroad either as part of your course or during the holidays. In addition, you will receive a small rate of interest (currently 0.1% gross) on credit balances. After you graduate, your interest-free overdraft will be extended for a further year, as long as you do not exceed the limit of six years. The Halifax no longer offers a graduate account but its Reward Current Account is suitable for graduates who earn at least £1,000 per month and stay in credit. Santander’s Student Current Account Santander’s Student Current Account was rated third-best by savethestudent.org. However, it received one of the lowest customer satisfaction ratings in the Which? research, with a score of 51 per cent. Savethestudent.org also states that research amongst students in 2011 found that this account had poor customer service. The benefits of Santander’s account include a guaranteed interest-free overdraft of £1,500. The only condition is that you have to pay in at least £500 per term. Santander also offers interest on credit balances up to £500. The current interest rate is 1.0% gross. In addition, Santander is also offering students a free 16-25 Railcard which is valid for four years and gives you one-third off train fares in the UK. This would be of great benefit if you travel by train between home and university regularly. After you have finished your course, you can transfer to Santander’s graduate current account. This has an interest-free overdraft for up to three years. The overdraft limit decreases gradually, helping you to pay off the full amount within three years. When choosing a student bank account, it is important to compare at least three different accounts carefully. The accounts described here are not the only accounts available and the most suitable account for you may not be among them. It is important, therefore, to do as much research as possible before making your final decision. Sam Jones, the author, has been looking at student accounts on uSwitch.com to try and find a decent deal for his son.
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