If you're a new student, you're probably wondering whether to open a student bank account and whether it's worth the bother, especially if you already have an active current account. Student current accounts are bank accounts with some features that are unique to students, particularly interest-free overdrafts, which can be a very useful buffer if you expect your spending to be more than your income.
Most banks and building societies offer student bank accounts, including Nationwide, the largest building society in the world with about 700 branches in the UK.
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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.
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Nationwide’s student account is called FlexStuden and you can open a FlexStudent account online. You’ll be asked a few questions, such as:
- If you already have a student account with a different bank or building society
- How high you’d like your arranged overdraft to be
- Information about your studies
- Information about yourself
You’ll get an answer straight away, about whether or not Nationwide will be able to offer you their student account.
The Nationwide FlexStudent account is only for students aged 18 years or over. Students must be enrolled on a full-time UCAS course and be within two months of the course start date¹.
The FlexStudent account is only for UK citizens, but students from the EU or EEA might wish to apply for another Nationwide current account¹⁺².
Nationwide only has one account that is specifically for higher education students. The FlexStudent account has some attractive features, primarily an arranged overdraft of up to £3,000 by the third year, a digital banking app, internet banking and a contactless Visa debit card. The interest-free overdraft facility is up to £1,000 for the first year, up to £2,000 for the second year to a maximum of £3,000 by the third year. You can request an increase of the overdraft in increments of £50.
You can make or receive international payments from/into the FlexStudent account, although there may be fees. You can also use it abroad or withdraw cash in a foreign currency but fees will apply¹. You’ll also receive interest on the student account which is paid at a rate of 1 percent AER/gross p.a. (variable) interest for credit balances up to £1,000.
An alternative to the Nationwide FlexStudent account is the borderless multi-currency account from TransferWise.
This account can be especially interesting for international students or UK students who travel frequently, as it’s possible to hold more than 40 currencies there. If you need to make and receive payments in different currencies, it makes sense as you can get local, virtual account details in EUR, GBP, AUD, USD and NZD to receive cheap or even fee-free payments in those currencies.
You can also get a linked debit card to the borderless account so you can use it to make everyday transactions, in most countries in the world.
You must be a UK citizen, over the age of 18 years and a full-time student on a recognised UCAS course to be eligible for the FlexStudent account¹. It's not available for international students, however, Nationwide advices to have a look at their other current accounts. You might be eligible for one of those².
What you should also be aware of, is that during each year of your study you have to pay in at £500 per semester. If you don’t pay in this amount each semester, Nationwide might remove your arranged overdraft, or refuse to increase it. And worst case scenario, they might close your FlexStudent account.
Once you’ve graduated you’ll no longer be eligible for a FlexStudent account and it will be moved to a FlexGraduate account, unless you’ve made other arrangements with Nationwide before the end of your course. If you have any unpaid overdraft left, you’ll also have to start paying it back¹⁺³.
There are no fees for opening or using the account⁴, in fact, interest is even paid on credit balances.
The only requirement is for a minimum of £500 to be paid into the account each term. And, interest is only charged on the overdraft after graduation, after which the FlexStudent account becomes the FlexGraduate account.
Nationwide also won’t charge you a fee for making a CHAPS payment, for example, where most banks will charge you around £25 for that kind of payment⁴.
A fee that you should be aware of, though, is the fee that intermediary banks can charge you when you make an international payment with Nationwide. This is not a fee from Nationwide themselves, but a fee that is connected to the SWIFT Network which is a network that banks use to process international payments. Your international payment starts at Nationwide, who won’t charge you a fee for it⁵, but then moves through 1 to 3 other banks, before it reaches the account of your recipient. And each of these banks can take their fee of off the amount, which can result in your recipient receiving less than you had intended.
Everyone who is eligible for the FlexStudent account is entitled to the interest-free overdraft, which is available as soon as the account is opened. The maximum amount is £1,000 in the first year rising by £1,000 each subsequent year to a total of £3,000 in the final year. Even when you exceed you’re arranged overdraft amount Nationwide won’t charge you a fee for it, but until you bring the balance back you won’t be able to take out cash or use your card to pay for things¹.
One of the main advantages of the FlexStudent account is the fact that you can apply to have the overdraft increased in increments of £50. This helps students to stay in control of their spending and offers an unusual degree of flexibility. With no fees to use the account, contactless debit card function and the knowledge that the overdraft facility will be available by the next working day, it has plenty to recommend it and it’s certainly a highly competitive student account for students who live in the UK.
However, the UK has many international students who might not be eligible for the FlexStudent account. The borderless account offered by TransferWise is an innovative solution for students who need to make and receive international payments in the UK without having to pay expensive fees. It can be a lot cheaper than comparable high street banks and offers multiple features, such as the use of a TransferWise debit Mastercard, with high levels of consumer protection. Visit TransferWise today to find out more about the borderless account.
Sources used for this article:
*All sources checked on March 15, 2019
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