University bank accounts

[BringOn2021]

Dc is about to head off to uni and needs to open their first bank account. I am aware there are many deals to be had, but which would you recommend?

Which has be best overdraft facility (no that they’ll need this)?
Is it best to go with no overdraft in lieu of other things?
which has the best customer service?
Online only or one that has a branch?
which is easiest to open and what info/docs will they need?

any and all help welcome!

DD1 opened a student account with Santander to get the overdraft and 4 year rail card. She used the overdraft to cover early needed deposits for Year 2.and when there was an overlap between tenancies year 3 and final year. It will all come good in the end and the overdraft will be paid off by getting her final year deposit back.

She kept her nationwide savings and current account. She transfers money from her student account to her current account so she lives on a monthly budget.

Slightly off topic but the main reason for needing an overdraft (if they otherwise keep within a budget) is if they need to self fund the deposit for the second year housing. I had all the finances worked out and this was the thing I hadn't considered. This can mean having to find the rent deposit for the following year quite early in year 1. They also tend to spend more in term 1 than subsequent terms so may go overdrawn in the first term and need to pay it back over Xmas (unless they have savings to fund these things).

Not sure if they still are, but some student accounts did have decent overdraft terms. Yes, at times some students do need this facility and learning to manage money and debt is a skill for life.

Mine have NatWest current accounts and Monzo savings accounts which they really like it's all done on the app.

My DDs both had kids' accounts with Santander so "upgrading" them to the student ones was fairly straightforward. However, as a PP has said, they won't accept them until they have the offer email from their uni. Based on my DDs' experiences, I would book the appointment with the bank of choice for the Monday or Tuesday after results come out as lots of people get their results then wander into the bank, by which time there are no appointments for weeks. DD1 was told that she had to go to our nearest university to sort it, which would have cost us a parking fee until they realised that they could do it in our normal branch.

As another PP has said, Martin Lewis's website has the best comparison. For my DDs the amount of free overdraft plus the free railcard and interest when in credit made it a no-brainer. DD1 is now 25 and a PhD student and only recently has moved to a different account as Santander is no longer ideal for her. DD2 has just graduated. She is waiting to see what life throws at her before moving or changing her account.

Mine both investigated and then went with Santander. Like other posters they were converting accounts they'd had for a while. Merely for information, the process of changing to a student account was slightly more involved for the one who took a gap year first (so the original account had already rolled over to an adult account); certainly requiring a visit to a branch.

PP thanks for the heads up that you have to go into a branch to upgrade a Santander account - I assumed it could be done online (like setting up their savings accounts). And given that it can take months to get an appointment (assuming we can find a branch) I guess we need to book an appointment now for after results day.

It was straightforward for the one who went straight from school, they were able to do it online. It was only the one who was 19 and just home from a gap year away who had to go into branch.

DD has a MOnzo account currently but is planning on opening a Santander one, mainly as her railcard runs out in September and she gets a free one with them. She can't do it until results day though.
A good friend of mine did a whole analysis thing on a load of accounts for her DD who has an unconditional and said Santander came out on top - can't remember why, there was a speadsheet but I glazed over

Railcards cost £30 for a one year one and £70 for 3 years. (I'm now boggling slightly that your DC hasn't already got one of those, either, but do you live in London and not travel much outside the tfl area?). Ours have all had 16-25 railcards from the off, and DS2 was of an age to take advantage of the 16-17 one when they came out, with the higher discount on travel, but then we use rail quite a lot and certainly for most open day / offer holder day visits in 6th form. I don't know which the 'free railcard' banks provide, as our DC all stuck with their original Lloyds 11-19 accounts then converted them when they got the relevant document to confirm their university place. Because they already had 3 year railcards at the time, that wasn't a particular draw when it came to a student account.

DD, like others, just transferred her Nationwide account into a student account. She didn't need the Railcard as already had one, but tbh, as Nationwide has given out £100 credit each year, that's way more valuable than the Railcard saving.

Ds1 who has just finished uni had a Monzo account from 16 and then once A level results were out opened a Santander student account for the rail card. He used his student bank account for his student loan to go into and pay his accommodation from, usually a direct debit to the uni, dates for payments are often on the uni accommodation webpage.

We then transferred him a weekly allowance to his Monzo account. Having the two bank accounts meant if there was an issue with one he still had access to money if needed so he left a "float" of money in his Santander just in case. He never touched his overdraft. He will shortly convert it into a graduate account.

Mine has an account with Nationwide so will look at converting that, otherwise NatWest seemed to have the best OD (if that’s what you need). I wouldn’t really be swayed by a free rail card as it’s only £70 for 3 years. I did see that some of the banks were offering a discount on restaurants (Eat?) I don’t think that seemed particularly valuable but I’m happy to told it is.

@Tulipvase

Depending on the year I think Santander's overdrafts are more generous and the Railcard is 4 years? All the other perks don't look very useful or have too many t&c for the average student ..

www.moneysavingexpert.com/students/student-bank-account/#santander

I’ll have a look, thanks.

Nationwide offer £100 cash back and £10 a month just eat vouchers for a year. And the OD appeared pretty favourable.

And my daughter has a savings account with them and got £100 this summer.

There Is just something about Santander that isn’t very appealing….

Just to update, should there be anyone else interested. Opening an account with Santander was easy, quick and completed within 3 days. Thanks to all for your brill suggestions!

ds is with Nationwide too. He has a student flex account and a savings account.

He has just applied for and was accepted for a credit card with them (he is end of 2nd year now). It only has a £500 credit limit, but it will handy for any purchases if he is abroad again and it's enough for him to start building a credit score.