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Best student bank accounts for overdraft offers

Latest student bank account deals compared

Students-sitting-on-lawn

As new students prepare to start their first university term, Which? Money has rounded up some of the biggest interest-free overdraft offers out there – along with smallprint pitfalls to watch out for.

If your outgoings are likely to exceed your income when you’re at university, then an interest-free overdraft should be your top priority when choosing your student account – over and above a free railcard or other enticing freebie.

But don’t ignore the smallprint when you’re comparing accounts – some of the interest-free overdraft offers aren’t always so attractive on closer look.

For more advice on managing your money while you’re at university, head to the Which? University website.

Biggest interest-free overdrafts

Halifax and HSBC offer the most generous headline overdrafts, with up to £3,000 available interest-free to students in their first year.

Barclays, Natwest and The Royal Bank of Scotland price-match their offers, with up to £2,000 of fee-free cash up for grabs.

A lower value overdraft is advertised by Ulster Bank (NI) at £1,000, while The Co-Operative Bank offers £1,400 for first-years.

We’ve compared 13 student bank accounts to help you weigh up what’s available.

Check the overdraft smallprint

If you think you’ll need an interest-free overdraft, make sure you’re aware of any limits or restrictions to this facility. Barclays entices new students with a £2,000 overdraft facility, for instance, but only £200 of this is actually available in the first term.

Similarly with Natwest and RBS, you’ll only get your hands on £500 of your overdraft in your fresher’s term.

Halifax advertises a £3,000 overdraft limit, but you’re only guaranteed £1,000 of this during your time at university – anything more will be subject to application and approval.

Don’t be sold on freebies  

Banks usually try to tempt new students to take out an account with them with a whole host of perks. This year’s offering includes a four-year railcard from Santander and a £60 Amazon voucher from HSBC.

It’s worth seeing what’s out there, particularly if the freebie is something you’ll actually use – but you need to weigh up the value of the giveaway against the interest-free overdraft on offer if you think you’re going to be using it.

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