Which Student Account?

When should I open an account?

You should open one as soon as possible, most banks will accept anyone with a UCAS offer letter (conditional or unconditional). So it's possible to open an account before the start of term and get preferential terms early. Most students will be receiving some form of financial help, such as grants and student loans, so you will need a bank account for these to be paid into.

Picking the best student bank account
Virtually every bank gives online access and free cash machine withdrawals, so which bank is closest to you should not affect your decision. Therefore you should compare the banks to see which has the best offers. A major factor in picking the best bank account should be the overdraft. A bank may offer the biggest overdraft, but this isn't everything as this will only encourage you to spend, spend, spend so from experience a £1000 overdraft should be more than enough to cover you for a year. Look for banks that offer a reasonable overdraft and make sure it is at 0% interest for the longest time possible, most banks will charge 0% interest until after you graduate. When taking out an overdraft it is important that you follow the following rules:

• Never go over the agreed overdraft as the penalties will be very expensive and your credit rating will be affected, which wont matter to you as a student but will in the future.
  
• As part of your application for an overdraft you will be credit scored and some students may get rejected because there is a lack of data available on you. There may be no solutio to this so just count yourself lucky thta you will not be able to get into debt with an overdraft as this will only add to your debt after you graduate.

The best student accounts for 2009

If you're an English or Welsh student in England or Wales, the biggest 0% overdraft is from Halifax. It offers a maximum interest-free overdraft of £3,000 every year, so the average limit over a three-year course is also £3,000. The problem with this is an upper limit, so you won't necessarily get the full amount immediately. Most people get just £500 to start with. However increases can be requested, but they depend on a credit score and they are not guaranteed but by the end of year one most should have access to the full amount. Annoyingly there's no way to find out in advance if you'll get all this money, but as the same's true for most other accounts, and it offers the biggest 0% overdraft. As I said before it is best to not go for the largest overdraft as this will just encourage you to spend more than you need to.

If you're Scottish the Royal Bank of Scotland offers a 0% overdraft of £2,750, this also gives you the choice of freebies; either £100 free cash or its Travel Package, which includes a three-year 16-25 Railcard (which cuts many UK rail fares by a third) and one month's free bus travel in Edinburgh, Glasgow or Aberdeen. Plus, apply online and you'll also get a free webcam.

Another good bank account is NatWest. It offers a free five-year 16-25 Railcard worth £120 so if you're a regular train traveller, this is well worth it as it will cut a third off many fares. The railcard is renewed each year provided you’ve used the bank account within the previous three months. NatWest gives a much lower 0% overdraft of £1,250 in year one, £1,400 in year two and £1,600 in year three, but this is a reasonable amount which will help you to save in the long run.