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Top interest-free 0% student bank account overdrafts

If you're off to university soon, getting the best student bank account should be a priority. 

Not only do you want a generous, 0% overdraft that lasts you the length of your course, you'll also want to make sure you get a deal that gives you the best perks suited to you. 

We compare 12 undergraduate accounts below – our table shows student accounts ranked in order of the maximum free overdraft they allow in year one. 

We also explain what happens if you exceed your overdraft limit and examine this year's student bank account freebies.

    Interest free (0%) overdraft Benefits 
  Min age Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Credit interest Freebies
NatWest/RBS Student 17 £2,000 £2,000 £2,000 £2,000 £2,000 n/a   Four-year National Express Coachcard 
Pay in £750 every six months and make three debit transactions every month to remain eligible for 0% overdraft.
First Trust Bank (NI) Student+ 18 £1,850 £1,850 £1,850 n/a n/a n/a    
Halifax Student 18 £1,500 £1,500 £1,500 £1,500 £1,500 £1,500 0.1% Cashback at various retailers
Bank of Ireland Student 18 £1,500 £1,500 £1,500 £2,000 £3,000 £3,000 0.5%  
Bank of Scotland Student 17 £1,500 £1,500 £1,500 £2,000 £2,000 £2,000   Free NUS extra Card for up to three years
Lloyds Bank Student 17 £1,500 £1,500 £1,500 £2,000 £2,000 £2,000   Free NUS extra Card for up to three years
Santander 123 Student 18 £1,500 £1,500 £1,500 £1,800 £2,000 n/a 1% (£100-£200) 2% (£200-£300) 3% (£300-£2,000) Four-year 16-25 Railcard 
Pay in £500/term to remain eligible for 0% overdraft.
TSB Student  17 £1,500 £1,500 £1,500 £1,500 £1,500 £1,500 5% (up to £500)  
Barclays Student Additions 18 £1,000 £2,000 £3,000 n/a n/a n/a   Personalised (photo) debit card; cashback at various retailers
Nationwide FlexStudent 18 £1,000 £2,000 £3,000 £3,000 £3,000 £3,000 1% (up to £1,000) Cashback at various retailers
Nationwide is the only provider that guarantees the maximum overdraft, however, you must pay in £500/term to remain eligible for 0% overdraft.
HSBC Student 18 £1,000 £2,000 £3,000 n/a n/a n/a   Free £60 Amazon gift card plus a year of Amazon Prime Student (ends midnight 31 October 2017)
Ulster Bank Student 18 £1,000 £1,000 £1,000 £1,000 £1,000 n/a    
Students of medicine, dentistry, law, accountancy, pharmacy, optometry, physiotherapy, veterinary science can apply for higher interest-free limits.

How do I open a student bank account?

You can apply for a student account from age 17 or 18 (see the table for details).

As with all bank accounts, you'll need proof of identity (passport, birth certificate, driving licence) and proof of address.  

You’ll also need the UCAS confirmation letter from your university as unconditional proof of acceptance (some banks may accept a copy of your A-Level results if you have a conditional offer but you’ll need to check first).

Will I get the maximum overdraft with my student bank account?

Not necessarily – these overdraft limits aren’t guaranteed. Banks will assess your eligibility on an individual basis, based on your credit score, so you may not get the maximum overdraft advertised amount.

It's worth noting that Nationwide says that as long as you don't have credit problems, and you stick to the account requirements, you can get the maximum overdrafts for each year. 

In some cases, interest-free overdrafts are extended in instalments, for example, first year students with a Lloyds account get £500 for the first six months from account opening, £1,000 from month seven and £1,500 from month 10.

A handful of banks also impose funding requirements to qualify for the full overdraft: 

  • Nationwide FlexStudent - pay in at least £500 per term from the date the account is opened (this can include your student loan, money from family members or any other income); 
  • Santander 123 Student - pay in at least £500 per term to increase the overdraft limit from £250 to £1,500; 
  • NatWest and RBS Student - pay in £750 every six months and make at least three debit transactions every month.

What happens if I exceed my overdraft limit?

With all of the accounts in our table, you won’t be charged interest or fees for using an overdraft, as long as you stay within your free limit.

If you need to borrow more money, contact your bank and formally arrange for the limit to be increased. Some banks may allow an extension to your free limit, but most charge 'arranged' or 'planned' overdraft fees/interest. 

For example, TSB charges a £6 monthly usage fee plus 8.21% EAR. 

If you exceed your free overdraft limit without authorisation, charges can be steep. Santander, for example, charges £5 per day (up to a maximum of 10 days). 

Nationwide doesn’t charge any fees but it does place restrictions on your account, preventing you from taking cash out or using your card, until you bring the balance back within your agreed limit. 

Charges if you exceed your 0% student overdraft 

  Planned overdraft  Unplanned overdraft
  Interest (EAR) Usage fees Interest (EAR) Usage fees
Bank of Ireland UK 0% £0 12.68% £0
Bank of Scotland a 8.21% £6/mth 8.21% £6/mth + £5/day or £10/day (if £25+)
Barclays n/a n/a n/a n/a
First Trust Bank (NI) 0% £0 0% £0
Halifax a 7.20% £0 24.2% £28/mth
HSBC 0% £0 0% £0
Lloyds Bank a 8.21% £6/mth 8.21% £6/mth + £5/day  or £10/day (£25+)
Nationwide n/a n/a 0% £0
NatWest/RBS n/a n/a 0% £0
Santander n/a n/a 0% £5/day (max 10 days)
TSB 8.21% £6/mth 8.21% £0
Ulster Bank Negotiable  £0 12.68% £0
Table notes:
a From November 2017, Lloyds Banking Group (Lloyds, Halifax and Bank of Scotland) will charge 1p per day for every £7 spent on planned overdrafts. Unplanned overdraft charges will be scrapped entirely.

Student bank accounts 2017/18 freebies

There are only a handful of student accounts offering freebies and/or interest this year. Previously, first-year students with a HSBC account earned interest at 1.5% above base rate on balances up to £1,000 but this offer was pulled on 1 August 2017.

Lloyds is offering a free NUS extra Card for up to three years if you open a student bank account before 31st October 2017 (this discount card normally costs £12 per year for offers such as 40% off at Pizza Express, 25% off student prices at Odeon and 20% off at National Express). 

HSBC is giving away a free £60 Amazon gift card plus a year of Amazon Prime Student if you open the account by midnight 31 October 2017. Other shopping discounts can be found at studentexclusives.hsbc.co.uk. 

Student bank accounts with railcards

The top student account freebie is offered by Santander. The free four-year Santander Railcard is worth around £90 (four-year cards aren't available for general purchase but three-year Railcards cost £70 and one-year Railcards cost £30). 

Be aware that Santander doesn't offer the largest interest-free overdraft, and you need to pay in at least £500 every term and register for online banking to be eligible for this offer (and the overdraft).

In comparison, we've valued the free four-year National Express coachcard that comes with the NatWest/RBS student account at £36 (four-year cards aren't available for general purchase but three-year Coachcards cost £27 and one-year Coachcards cost £12). 

Student bank accounts paying high interest

Santander also pays interest on credit balances. The rates are tiered, so you earn:

  • 1% if your balance is £100 to £200; 
  • 2% if it's £200 to £300;
  • 3% if it's £300 to £2,000.

The most you could earn is £60 a year. 

The only other banks paying credit interest to students are Nationwide, which pays 1% interest on balances up to £1,000, and TSB, which pays 5% interest on balances up to £500. 

What happens to my student bank account when I graduate?

Once you've got your degree, you can usually convert your student account to a graduate account with the same bank, but make sure other banks don’t beat it. 

For example, Nationwide transfers your account to a FlexGraduate (which is only available to FlexStudent customers) – the interest-free overdraft limit falls to £2,500 one year after graduation; £1,750 after two years and £1,000 after three years. 

Here's our pick of the best graduate accounts.

More on Student And Graduate Bank Accounts