Consider all the options now to save money later!

Moving away, making friends, managing your money: there’s so much to think about as a new student.

Whilst taking control of your cash is a bonus, it can be daunting, especially if you’re planning to fit part-time work in with full-time studying. We’ve got all the info you need on student bank accounts and we’ll show you how to take advantage of your financial freedom – one step at a time.

Finding 'the one'

Around a fifth* of students meet the love of their life at university, meaning you may find yourself graduating with both a degree and a special someone.

And a romantic connection is not the only meaningful relationship you might make as a fresher: stats suggest that most people stick with one main bank throughout their life. This is why banks want to woo you as a student, knowing you are likely to become a long-term customer with substantial saving power (graduates typically earn a higher average salary than non-graduates). Choosing the right account matters, so taking your time to consider all the options now will save you money and peace of mind later.

*One Day University Love League Survey

Your cash stash: what to consider when opening a student bank account

You might have heard that ‘there is no such thing as a free lunch’. Sure, incentives such as vouchers, railcards and insurance are appealing, but a bank offering £50 worth of digital downloads might be nowhere near as good as an account with a four-year, interest-free overdraft. Work out the value of what’s being offered as an overall package; long-term benefits are often more valuable than the initial incentives.

Most student account providers offer a 0% overdraft facility, meaning you’ll have a buffer should you face a situation when you need some emergency cash. However, remember that an arranged overdraft is not ‘free’ money; you’ll always have to pay your overdraft borrowing back (and if you spend beyond your agreed limit, you may face hefty charges). And beware that advertised limits are not always guaranteed. Also check to see if there are any fees, or charges for going above your arranged limit.

Want to know more about the overdraft? Visit Money Worries to learn how to deal with debt as a student.

Just as you would when buying a computer or mobile, shop for the best student bank account. Double check if there are any hidden transaction fees. If you’re prone to splashing the cash, look for a bank which caps your spending if you hit the arranged overdraft limit. You can also sign up for text alerts to warn you that you’re nearing the maximum.

You should be able to get an account overview online or in branch which will detail any charges or fees and their costs. These could include unpaid transaction fees, foreign usage or unarranged overdraft fees.

Student life is about so much more than managing money, but take the time to check your account status regularly too. Most accounts have both Internet banking and mobile banking facilities – accessible via your laptop or smartphone – ideal for logging on between lectures. Before signing up for your new account, find out what digital facilities are on offer.

Although you’ll probably do a lot of your money management online, there may be times when you need to speak to someone or seek advice, so find out where your nearest branch will be.

Once you’ve completed your course, most student bank accounts will move you onto their graduate account. These can vary in length (typically between 1 and 3 years), and have been designed to help you re-pay your overdraft. After your graduate account you will be moved onto a standard current account.

So when looking for your student account, you might want to check out the provider’s graduate account at the same time, as they vary in the time they give you to pay back your overdraft and how much they charge.

Long term benefits are often more valuable than initial incentives!

Opening an account

There’s a lot to sort out before heading to university, so it’s a good idea to prioritise your finances. After all, you don’t want to spend Freshers Week worrying about what’s in your wallet.

Although you won’t be able to open your account until you have confirmation of your place, it pays to do your research in advance. Start shopping around for your student bank account as soon as you accept an offer, taking your time to weigh up the pros and cons of each. Consider all the options available – the fees and charges, the overdraft, the opening incentive(s) – and make an informed decision based on what’s right for you. Then, when you have your exam results, get straight on to setting it up. You can usually begin the application process online, but you’ll probably need to take your documentation (original copies, not photocopies) into a branch in person.

Take into branch:

1

Proof of ID

A passport or photocard driving licence.

2

Proof of address

A bill, bank statement, or Local Education Authority notice of financial support.

3

Proof of student status

An acceptance email from your university, or UCAS confirmation letter.

4

UCAS status code

A 4-digit or 16-digit code emailed to you by UCAS.

Managing your money

So you’ve set up your student bank account, and perhaps you’ve even got your first loan payment through. The next step is to learn to manage your money like an accountant. Here’s how it works:

Ways to bank

Online/Mobile

Log in via your computer, tablet or smartphone

Branch

Book an appointment or drop in

Telephone

Ring a secure number via your landline or mobile

Ways to pay

You’ll probably be using one already: the money you spend comes straight out of your account, but instead of carrying around money, you use your card. You’ll be required to enter your PIN when paying, though for anything up to £30 you can simply tap and go (contactless). Money spent using your debit card will come straight out of your student account – just as it does when you take cash out from an ATM – so be careful to only spend what you have.

Use for: day-to-day purchases such as food, books, toiletries, travel and entertainment

Increasingly, we shop or bank online and many bills can be settled via an instruction you set up. This may be a standing order, which you set up to transfer a regular payment for a fixed amount to someone else. Or it may be a direct debit where you allow a variable amount to be taken automatically from your account. It may also be a one-off payment that you make yourself. The beauty with banking this way is that online transfers tend to be instant so you can see exactly how much you’ve got left in your account.

Use for: regular bills such as rent or utilities (gas and electricity, water) or for sending money to family or friends

To manage your money on the go, you might want to register to make payments via your mobile.PayM (‘pay em’) is a mobile banking system provided by banks and building societies in the UK. By linking your bank account to your mobile number, you can send and receive money using only your mobile phone digits. Use for: making a quick one-off payment when you realise you have no cash

For an easier way to pay, turn your phone into your purse and never fumble around for cash or cards again. Simply add your debit or credit card to your smart device, and then tap the app to pay wherever you see the contactless symbol. Safety and privacy is assured since neither Apple nor Android actually share or store your card details.

Use for: everyday shopping such as food and toiletries, in-app purchases when you don’t want to input your card number

* Apple and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries

** Android Pay™ is a trademark of Google Inc.