Cash incentives on student bank accounts ‘less generous this year’

Students should weigh up the benefits of bank accounts against any charges, Defaqto said.

Students searching for a bank account may find they are offered less cash upfront this year, according to Defaqto (Chris Radburn/PA) (PA Archive)

Students searching for a bank account may find they are offered less cash upfront this year, according to analysis.

Cash incentives have been a big draw for students over the years and in the past they have been around £100.

But this year the amounts being offered are lower and only a handful of the major providers are offering any cash, according to financial information experts Defaqto

The highest amount among the providers it looked at is £80 cashback from HSBC UK. The deal also includes a choice of a £20 Uber Eats voucher or a year of unlimited next-day delivery with Asos Premier.

NatWest and RBS are offering £50 cash upfront this year.

Banks know that graduates are likely to be good customers

Katie Brain, Defaqto

Several banks are offering cashback at certain retailers when students shop there, Defaqto said.

It added that TSB’s student account is offering 5% on balances up to £500.

The Halifax student account meanwhile pays 0.1% interest.

Student accounts also tend to offer interest-free overdrafts. The amount offered is sometimes staggered so that it increases over the term of the account.

Katie Brain, banking expert at Defaqto, said: “Banks know that graduates are likely to be good customers, potentially earning higher salaries after university, and this is why the student bank account incentives are so generous.

“Managing money when you leave home for the first time can be daunting and it’s important to get a bank account that suits the student.

“For anyone about to sign up, consider how you can access your account, and weigh up the benefits against any charges you are likely to be hit with. University life can be expensive and it’s important to make the most of every pound you have.”