Student finance: Finding the right bank for your needs

What do you look out for when trying to find the bank account for you?

Most banks will have cards that can be used at any hole in the wall/ATM, as long as it has the Link logo on it (Rob Brewer)

Most people of university age haven't worked for a long enough time to have significant savings they can live on while they study. It's especially important now to figure out which bank you want to open a student bank account with, as you will likely stay with them for a long time.

Banks know this, so they’re desperate to grab customers when they are young. This means there are all kinds of great offers for students out there, but you need to be clued up about what you need . When you’re looking at which bank to go with, keep the following in mind:

• Be realistic with what services you need. Are you going to want to bank online? Do the bank have a good reputation for anti-fraud measures? What about going abroad?
• Balance being realistic about your financial needs with being realistic with what you actually have access to. Don’t burn through your overdraft all at once. When you’re in well into your overdraft, it’s very difficult to get out and back into the black, especially if you’re on a low income. Crack down on your spending and balance it with your income – factor in loans, income from any regular jobs, and any extras you might be earning.
• Make sure you look at the guaranteed overdraft you’ll be entitled to each year - not the maximum. Banks say that they allow students ‘up to’ a certain amount of money, but this is a bit sneaky, as they are under no obligation to provide it – it depends on your credit status. The bank can reject your application for an overdraft extension, and this in turn can harm your credit rating – so you need to know what you are definitely entitled to.
• Check repayment conditions. When are they going to expect that you pay back the overdraft? When will your overdraft no longer be free? If you don’t check this, you could be landed with a sudden request for a lot of money. Most banks will switch your student account to a graduate one and have a phasing-out period for former students, where they will gradually lower the amount you’re allowed to borrow.
• Don’t go for a bank that’s simply convenient and has a branch on campus - you can withdraw money from most bank accounts from any ATMs.
• Check in-credit interest rates, fees for arranged overdrafts, and interest rates on borrowing. In-credit interest rates are better the higher they are because they will give you interest on your credit. Fees for arranged overdrafts should ideally be nothing, and interest rates on borrowing should be at a minimum, ideally 0%.
• Look past the perks. They’re attractive, and they’re useful now, but are you really going to use them, and are they going to come in handy three years down the line? Find a bank that’s reliable, whose services and style you like, rather than the one that offers you a great freebie.

Find out which banks offer the best student account with our full student banking guide.