Choosing the right student bank account is crucial. Banks will offer all sorts of incentives, from cashback tickets to free railcards, and while these can be a great bonus, there are other important things to consider. For most penniless students, the key factor will be an interest-free overdraft facility. Those lucky enough to have savings will want better savings rates.
BEST FOR INTEREST-FREE OVERDRAFT:
Halifax Bank of Scotland
If by 'best' you mean biggest then HBOS tops the table with a whopping interest-free overdraft of up to £3,000 throughout your studies.
However, those who exceed the overdraft limit will be charged eye-watering interest of 24.2%. There is also a £28 penalty for going over the limit. Move to another bank after university, one with a graduate account that gives an interest-free overdraft for three years.
Royal Bank of Scotland isn't far behind, offering £2,750 fixed from day one. But again, this is marred by the punitive 29.84% interest above this limit.
BEST FOR FREEBIES:
NatWest
It's hard to top NatWest's free five-year 16-25 Railcard worth £125. This knocks a third off rail fares and will save students a fortune. For those who don't travel by train, Lloyds TSB offers £100 cashback for joining.
BEST ALL-ROUNDER:
HSBC
Doesn't offer the biggest overdraft at £1,000 in the first year, increasing to £2,000 in year five, but its rate of 8.3% if you exceed your overdraft limit without permission is one of the lowest. There are also no additional penalties.
The incentives are useful - two years' free worldwide travel insurance, plus overdraft limit alerts at cash machines. And it pays 6% on your first £1,000 of savings - if you have any! - in your first year.
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