Bank Accounts for UK students
Do I really need a bank account?
You must have a bank account. You must provide SAAS, or your LEA or ELB, with bank account details in order for you Student Loan to be paid. A student bank account just has more features and benefits than a basic bank account.
Who is eligible?
- UK residents
- Usually, only full-time undergraduates who are enrolled on a degree course are eligible for a student account.
- Check with your chosen bank for details. Each bank differs in what they can offer you.
Who is not eligible?
EU students and International students.
How to apply?
Once you've decided on the account, ask the bank for the product information and check the terms and conditions. Dull as it may seem, spending ten minutes doing this could save you money later on.
To apply for an account you'll need to prove who you are and prove you will have money, such as your loan, coming in.
Proof of identity
By law, banks and building societies have to check that you are who you say you are.
You'll need two documents to open any bank account; one to prove who you are; the other to show where you live. The same document cannot be used as proof of both.
The following documents are acceptable:
Proof of who you are:
- UK passport.
- UK photocard driving licence.
- Birth certificate.
- NHS medical card or other.
- National Insurance card.
Proof of where you live:
- UK photocard driving licence.
- UCAS letter showing your name and address.
- Student Loan Company award letter.
- Recent utility bill.
- Car insurance certificate or a vehicle registration document.
Proof of income:
- Award letter from the Student Loan Company.
- Direct debit instruction from a parent or guardian showing funds to be paid into your account.
The following are the most common features generally available with a current account.
Overdraft
- This is a main feature of a current account.
- When the amount of money withdrawn from a bank account is greater than the amount actually available in the account the excess is known as an 'overdraft' and the account is said to be 'overdrawn'. If agreed in advance by the bank this is essentially a form of loan facility. If not agreed in advance by the bank, charges may be incurred.
- Check whether there is a free overdraft limit - or whether you have to pay interest on your overdraft.
- Check the total amount that you can go overdrawn before you get charged by the bank.
- Check what the charges are when things go wrong.
Debit card or cash machine card
- These cards have brand names such as Maestro, Connect, Switch, Solo, Visa Electron or Visa Delta (Please don't confuse Visa Electron and Visa Delta cards with Visa's credit card facilities).
- They make it easy to pay in shops, bars or restaurants and to get cash from a cash machine.
- You can also use these cards to get information about your account from a cash machine, such as current balance or get a mini statement of recent transactions.
- A debit card is not a credit card. Any money you spend on a debit card will be taken from your account immediately. If there isn't enough money in your account your purchase may be refused.
Credit Cards
- Many current accounts offer access to a credit card with an agreed limit - the maximum amount that you are allowed to spend (or borrow) on the card.
- Always check the APR (Annual Percentage Rate) of a card. This gives a good idea of the amount of interest you'll be charged if you do not repay in full each month. The higher the APR, the more you're likely to pay in interest.
- Credit cards are an expensive way to borrow if you're not careful.
Access
Many banks now offer telephone and/or internet banking. This can be a great way to keep tabs on your account as these services are usually available 24 hours a day, 7 days per week.
There is no additional cost to pay for using these services - other than the cost of the phone call or internet connection.
Direct debits and standing orders
Pay bills direct from your account and lets you receive payments direct into your account.
Free Banking
Check that free banking is offered.
You can operate the basics of your account without incurring costs, so long as the account remains in credit.
Charges
Check what charges you might incur if you stray outside agreed limits without prior agreement. You may find yourself facing a wide range of charges for simply using your account if you go overdrawn without agreement.
Student Advisors
Many banks offer access to a banking advisor who will give advice on how best to manage your finances. Typically, they will advise on how to manage any debt you may have, or how best to plan for future educational costs.
Important points to consider when choosing a bank account.
Branch Location
- Check where the nearest branches. Being able to pop into a branch, close to where you're studying, may be important to you.
- Check opening hours. Bank opening hours can seem archaic and may not fit with your pattern of attendance or study.
- Some banks have branches on campus and this may be the best option if you want easy branch access.
- Don't join a bank that has a branch close to your home if it doesn't have a branch close to where you're studying.
We've compiled a list of major banks that are near the main campus, this is to help you select the bank that is right for you.
Incentives
These are a group of typical incentives that are offered by banks to encourage you to select them. Remember, this is not what is important when selecting an account:
- Free railcard and/or coach card.
- Discounts or vouchers for books at leading book retailers.
- Discounts or vouchers for CDs, DVDs and computer games
- Free driving lesson.
- Cash payment up to £55.
- Discounts at certain high street restaurants or cinemas.
Does this have to be paid back?
Any money you access on your overdraft will have to be paid back, it is not 'free' money.
How does this get paid back?
Many student bank accounts allow you to pay back in stages, after you graduate. You may need to check with your chosen bank when the first instalment of the overdraft has to be paid back as it may differ for different banks.