If you’re planning to study in the UK, getting a student bank account is a great idea. Student accounts often have features and benefits which aren’t usually available to regular account holders, including fee free overdraft facilities and student friendly perks. You’ll want to research the student account options available, to find the one which fits your needs.
This guide should help you decide - covering how to open a student account, questions to ask when comparing products, and some important points for international students to consider.
If you want an alternative to a regular bank account - especially if you’re an international student or love to travel - it helps to know that you’re not limited to high street banks. We’ll also cover the TransferWise borderless account. This smart new multi-currency account comes with low fees for cross border payments, and convenient and safe online options to make managing your money easy. Details on that, and more, later.
Planning on studying in the UK? If you need to make payments to or from your home country, TransferWise could save you money versus your bank
Before you get started, a bit of information about international payments.
Going to university can be expensive. Classes you have to pay for, books you have to buy and, if possible, you want to enjoy student life as well. Maybe you’ve been saving money to go and study abroad, or you have family or friends who are helping you out, either way, sending money abroad can be a costly business.
Banks and money transfer providers often give you a bad exchange rate to make extra profits, and most of them use intermediary banks to send your money across borders. All of this can add up pretty quick. However, there’s an alternative.
TransferWise is different. Its smart new technology skips hefty international transfer fees by connecting local bank accounts all around the world. Which means you can save up to 8x by using TransferWise rather than your bank when you send your money abroad. Oh, and TransferWise gives you the most fair exchange rate out there, the mid-market exchange rate.
Check out how to make your first transfer with TransferWise. And give it a try.
Many UK students choose to open a specific student account to make it easier to manage their finances. Student accounts typically have features and benefits which have been designed to appeal, including overdraft facilities, help after graduation, and discounts and offers for services students need.
Different banks have different application processes, so you’ll want to double check the details once you have selected the right account for you.
To give an example, if you’re opening a Lloyds Student Account you can start to apply online but you’ll then have to visit a branch to show your documents and complete the process. On the other hand, you can get a NatWest Student Account entirely online, by completing an application form and submitting scanned copies of your documents.
In most cases you’ll be asked for the following paperwork to set up your student account:
- Proof of your identity, such as a passport or driving license
- Proof of address - usually a utility bill in your name, although a rental agreement or a statement from another bank may also be accepted
- Proof of your student status, such as a UCAS letter or code
You’ll need to compare the student accounts available to you, to see which is the best fit for your needs.
Identifying exactly what you need from a student account should be your first step - whether that’s paper-free banking, cheap international transfers, or simply the largest available overdraft. Knowing what really matters can help make sure you choose an account which will suit you and keep your costs down in the long term, without being swayed too much by limited term perks and offers.
The Santander student account, for example, which is called the Santander 1|2|3 Student Current Account comes with a free 4 year railcard which gives reduced price train fares, as well as a range of discounts at selected retailers. This could save you a lot of money if you travel by train in the UK frequently, but it won’t be a great deal for everyone. HSBC also offer preferential interest rates if you have an HSBC Student Account - but this is only a real benefit if you’re planning on topping up your savings while you study
Here are a few questions to consider when comparing student accounts:
- Can I open my student account online, or do I have to go into a branch?
- Is there a branch near to my university or accommodation so I can get face to face help when I need it? If not, what’s the online and telephone banking service like?
- What overdraft facility is available, and will it be increased as I go through my course?
- What fees do I need to know about, for making or receiving international payments, or if I exceed my overdraft, for example?
- Does the account offer a linked debit or credit card, and can I manage my money online using an app?
- Are there any freebies for students - and are they things I'll actually use?
It’s also important, if you’re an international student, to check the eligibility criteria of different accounts, and also the fees. The terms and costs of student accounts may be different for international students compared to local students - more on that in a moment.
In the UK, students can sometimes be split into 3 categories - home students, home (EU) students, and international students. In general, when it comes to anything from fees to student accounts, the best deals are offered to home students, with the options on offer most limited for international students.
The deciding factors on which category you fall into include your nationality, where you’ve lived for the past 3 years, and your reason for coming to the UK.
This means that it can be a little complex to work out whether you count as an international student. You may be a UK citizen, for example, but if you’ve been living abroad for the last few years, and are coming back only to attend higher education, you might still fall into the international student category.
Not all banks which offer student account products make them available to international students. For example, the TSB Student Bank Account requires applicants to have lived in the UK for at least 3 years. Unfortunately this will rule it out for most people considered to be international students.
If you’re opening a bank account as an international student in the UK, you’ll also need to look at the features and fees of different products carefully. Even the accounts which are available to international students might not offer the same terms as there are for local students. To give an example, although the RBS Student Current Account offers some great perks, there is a monthly fee for international students, and overdrafts are not typically offered to students from overseas, either.
All that said, some banks do offer a product specifically for international students. Check out Barclays Student Accounts - including the International Students Additions Account, if you want an international student account from a familiar high street bank.
It’s good to know that there are other options out there, if you’re an international student and want an alternative to a high street bank account.
Instead of using traditional banks, you could get a TransferWise borderless account. With the borderless account you can hold your money in any of over 40 different currencies and switch between them when you want to, using the Google exchange rate with no markup added. You just pay a low upfront fee. You’ll get your own local bank account details to receive fee free payments in major currencies, and a linked debit card to make spending easy. The low fees for cross border payments can mean international students pay much less in charges with the borderless account than with a regular bank.
Usually one of the big benefits of a student account is that many students can get a fee free overdraft to help cover their costs while they study. However, it’s important to know that these services are usually restricted to UK citizens and those considered to be local students. Unfortunately international students typically won’t be able to access overdraft facilities.
If you are lucky enough to be eligible for a fee free overdraft, it can be a great help. Different banks offer their overdraft products under different terms. The Halifax Student Account for example comes with a fee free overdraft which could be up to £1500, for the duration of your course plus one year, to a maximum of 6 years. If you get a Nationwide Student Account you may be able to apply for an overdraft of £1000 in your first year, rising to £3000 in year 3 of your course, depending on how you’re managing your account.
When you apply for your student account you’ll be asked how long you’ll be studying for. After that period, or if your status changes and you end your study early, you won’t be eligible for your student account any more.
When this happens, most banks switch your account automatically to a graduate account, which might still have favourable overdraft facilities. If you’re an international student, you may find that your student account changes to one of the bank’s regular account products. In most cases you’ll have a few months notice of this happening, which gives you enough time to make alternative arrangements if you need to.
Going into higher education is exciting but it can also be a little daunting. You’ve got a lot on your plate if you’re trying to make all the arrangements you need to manage your money, at the same time as settling into a new place and new routine. The good news is that there’s a great variety of student accounts out there, so you’ll definitely find one that suits your needs, if you do a bit of research. Use this guide as a starting point, and you’ll be all set up and ready to get stuck into your new life in no time.
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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