5 Things To Consider When Choosing A Student Bank Account

If you’re a student and you’re heading off to college or university then choosing the right bank account is one of the most important financial decisions you will make.

There are dozens of student bank accounts available with a wide variety of banks and building societies.  Our guide looks at five of the most important factors you should take into account when choosing a bank account.

1. Fees

Many experts believe that the days of fee-free banking are numbered.  Increasing numbers of companies charge for their bank accounts and it’s not unusual to pay anything from £5 to £15 per month for a current account.

Whilst many of these so-called ‘packaged’ current accounts offer a range of perks including mobile phone insurance and annual travel insurance, there is no point paying for these benefits if you’re not planning to use them.

Research the market to see if there are any student bank accounts that don’t charge any monthly fees.

2. Overdraft

Many students use their overdraft facility at some point in their college or university career.  A 2007 study by the bank Halifax found that 73 per cent of students used a bank overdraft with the average undergraduate owing £952.

When comparing student bank accounts always consider the size of the overdraft that you are being offered and any associated fees.  Many banks will offer a fee-free overdraft of between £500 and £1,000 on their student accounts.

3. Related products

One of the main reasons that banks are keen to attract students is that they will frequently try to cross-sell other products to you at a later date.  And, the related products on offer from banks can often be of benefit.

For example, a bank may offer preferential interest rates on a savings account if you take out their student bank account or they may be able to offer you a low rate credit card.

4. Service

Students lead busy lives and so being able to easily manage your bank account is important.  Picking a bank with a branch close or near to your university campus is often advisable as is choosing a bank who offer excellent service.

Secure, 24 hour telephone and online banking makes managing your finances much more comvenient.

5. Gifts

Many banks and building societies offer gifts and incentives to new account holders.  These can include vouchers, discounts or travel cards.

Whilst the gift on offer should not be the primary reason to choose a particular account, if several accounts offer the facilities you need then you may be able to take advantage of a one-off gift when you sign up.