Whether it’s your first time opening a bank account, whether you’re opening a bank account because you’re new to the UK, or whether you want to take advantage of some of the perks of a student bank account, we are here to guide you through the process.
Home Student Bank Accounts
Home students are those who are resident and have settled status in the UK on the first day of the first academic year of their course.
One perk of being a student is a student bank account. They often come with interest free overdrafts and freebies, so make sure you pick the one best for you!
You will need to prove your student status when opening an account. You can do this by creating a Student Status Letter. Find information and a tutorial on Wayfinder on how to create your own Student Status Letter.
Things to consider when choosing a UK bank account:
- Which has the largest interest free overdraft, and how long do you have to pay it back after graduation?
- Is the overdraft up to or guaranteed (as up to may mean this amount of overdraft is only available in the final year of university and to students with a decent credit rating)?
- What freebies does it offer, and is an account with a 0% £3000 overdraft with no freebies better than an account which offers £2000 0% overdraft and an additional small freebie? (Short answer, probably!)
- Which freebie will be most useful to you in your university life?
Every year Save The Student rank the student bank accounts for home students and consider the positives and negatives of each. Find that here. You can also find more information on student bank accounts on Martin Lewis, Money Saving Experts, website.
International Student Bank Accounts
Some international student bank accounts also come with perks such as zero transfer fees or low interest overdrafts. If you are trying to open a UK bank account as an international student, as well as your Student Status Letter you will likely also need:
- An in-date passport.
- A valid visa.
- A bank statement from your home bank, from the past three months.
- Proof of address in the UK or abroad (check with your bank).
- Student ID or an acceptance letter from your university.
Every year Save The Student rank the student bank accounts for international students and consider the positives and negatives of each. Find that here.
International students also have the option of staying with your bank account from your home country. If you choose to this, please make sure that you check how much it will cost to withdraw money and pay with your debit card in the UK. You may also wish to use a digital app bank such as Revolut or Monese. Find out more about app-based and digital banks on Save the Student.
Additional Fees and Charges:
Banking can, depending on your type of bank account, bring additional fees and charges. The most common include:
If you have a current account, it might be possible to take out more money than you have in your account. This is known as an overdraft and there is usually a daily cost associated with being in your overdraft. Generally, you will be charged between 15% and 40% APR (annual percentage rate) for using your overdraft. Find more information on Money Helper’s “Overdrafts Explained”.
If you go over your authorised overdraft limit, you may be charged for every card payment, cash withdrawal, or cheque that you make (even if the bank does not allow the payment to go through).
In the UK, taking money out of a cash machine with your debit card is usually free. However, some convenience cash machines (particularly those in small shops and night-time venues) can charge every time that you withdraw money – typically up to £5. You will be notified of this on the machine before making the withdrawal.
Banks charge fees of up to 3% for most international transactions (such as using your debit card to buy things whilst abroad or to withdraw cash).
Digital Banking
There is an increasing number of banks known as “digital banks” which offer online only banking (they do not have branches that you can walk into). They do still however often both online and telephone support.
Some of the main digital-only services are Monzo, Revolut, Starling, Monese, and Chase. They are an option for international students as long as appropriate documentation can be provided.
Many of them have additional built-in features such as budgeting support, helping you to save money in the long-term, and most people tend to use them alongside their traditional bank account in order to use these additional features.
Some of the key features that these banks offer are:
- fee-free overseas spending within certain limits
- instant notifications when spending/ receiving money
- the ability to set and monitor savings goals (short-term and long-term)
- the ability to lock, unlock and cancel your card through the app
- ‘split the bill’ functions that make it easy to split bills and send money to friends/ family
However, some of these banks are not regulated or authorised by the Financial Conduct Authority (FCA) meaning that they are not closely monitored or controlled. They may also not be protected by the Financial Services Compensation Scheme (FSCS), meaning if the bank goes out of business you may not be compensated and could lose your money. Before opening an account with a digital bank, make sure that you read the Terms and Conditions and ensure that they are both FCA and FSCS approved.
How can Your Advice Service help you?
We can help you in making sure that you have all of the correct information to open a student bank account.
You can contact us by completing an Enquiry Form.