This autumn hundreds of thousands of students will be heading to university for the first time. As well as the excitement there are lots of things to consider in advance, especially for those who have never managed their own finances alone.
The obvious step to take might be to switch your current account to a student one, but in reality it might not be the best thing to do. But fear not, Money Saving Expert – founded by financial expert Martin Lewis – is here to help with some essential tips for new students and their parents.
Read more:Four tips from MoneySavingExpert to cut down on your food bill
According to the site, having an overdraft is a good option. However, it is important to not be persuaded by perks or freebies. They wrote: “Many accounts throw in free cash or other perks, and while that’s part of the equation, grabbing a large 0% overdraft is more important, so you’ve as big a spending buffer as possible.”
Money Saving Expert also explained the difference between ‘guaranteed’ and ‘up to’ overdraft rates. They said if an overdraft limit is guaranteed, everyone who’s accepted will get that limit, subject to specific conditions. However, most accounts give ‘up to’ overdraft limits, which means your credit history will determine what you get.
Students likely won’t have much of a credit history so it could be difficult to get the biggest amounts. Money Saving Expert’s top student accounts below offer the highest definite 0% overdraft as well as some other perks.
Here are the top student bank accounts according to Money Saving Expert:
Santander 123 student account
To qualify for this account, register for online banking and pay in more than £500 a term.
0% overdraft offer
Everyone accepted gets:
-£1,500 in years one to three
-£1,800 in year four
-£2,000 in year five
Freebies
Free four-year 16-25 Railcard. It gives a third off many fares and usually costs £100. You’re sent a code via Santander’s online banking to claim it, which you must do within 60 days.
HSBC student account
0% overdraft offer
Everyone accepted gets:
– £1,000 in year one
Then, based on credit history:
– Up to £2,000 in year two
-Up to £3,000 in year three and beyond
Freebies
£100 FREE cash if you use your debit card more than five times within 30 days of opening the account.
Nationwide FlexStudent account
Pay in more than £500 each term to qualify.
0% overdraft offer
Based on credit history, you get:
-Up to £1,000 in year one
-Up to 2,000 in year two
-Up to 3,000 in year three and beyond
Money Saving Expert added: “These accounts are available to freshers, but others may also qualify. New university students can apply for all the deals above. Those in later years or doing certain apprenticeships or BTEC courses may sometimes qualify too.”
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