Choosing a student bank account

Are you finding it difficult to choose a student bank account? Jane King, author of Personal Finance gives advice on student bank accounts and what to consider when choosing a bank.

So you're off to Uni, congratulations! On top of everything else to think about, there is a question of which student bank account is going to be best for you.

Have you ever stopped to wonder why banks offer good incentives to try and get you to sign up for their student account, even when you are not likely to have much money?  An old saying provides the answer - most customers are more likely to get divorced than to change their bank account. Join a bank as a student and you are likely to be their customer for life.

So how do you choose your bank?

Three things to consider:

Which of the "freebies" offered by the banks is going to be of most use to you? For example, if you drive a car and don't use the train, then Santander's free rail card is not going to be of value. On the other hand if you are a regular train user then this could be a real incentive to join Santander. Most of the main banks offer some form of incentive to take out their student account, so think about which of them would be of the most value to you and include that in your decision making process.

Will you need an overdraft? An overdraft is a form of borrowing, allowing you to draw on your bank account even when you have no funds available. Most banks will allow students an interest free overdraft, which seems very generous. But remember this is just a loan and will have to be repaid at some point, so best advice would be to keep borrowing to a minimum. Banks are willing to lend you the money now, because once again it ties you into the bank. At some point after you graduate they will start charging you interest and the loan will have to be repaid. Most money advice websites will tell you to choose the bank that offers the largest interest free overdraft. An alternative point of view would be to try and keep any overdraft to a minimum and live within your budget, thus making the size of any overdraft offered by the bank less relevant to your choice of bank account.

What about levels of customer service? Some banks score more highly on this than others, although they all have their moments.  If customer service is important to you then you can read all sorts of reviews and comments on a variety of websites, but for every good review of a bank there is likely to be an equal and opposite one. Generally all the banks will do their best to provide a reasonable level of service, but it is up to you manage your bank account carefully and to pay attention to your bank account.

Whichever student bank account you choose, keep on top of your financial affairs and always keep a record of any dealings with your bank, put things in writing where possible.

Written by Jane King, a Senior Lecturer, Department of Accounting, Finance and Economics at Oxford Brookes University.