Battle of the student accounts hots up as results day looms

If your first foray into adulting is to find the best account to see you through uni, look no further

Graduates can end up leaving university with debts of £60,000 (PA)

This time next week, thousands of arguably the hardest-earned A-level results in modern history will have been revealed.

But while this year’s grades will be awarded against a backdrop of exceptional circumstances, they will still throw up plenty of the same age-old questions.

We can’t tell you whether you can afford further education, or whether it will be worth it.

Part of the problem is that a first year going to university this September may well emerge in three years owing more than £60,000 to the government backed Student Loans Company, but only 25 per cent are expected to pay it all back anyway, according to the government’s own forecasts.

What we can do, though, is suggest the best student bank accounts to help get you through.

And here, at least, there’s some good news.

So keen are banks to get you while you’re young – mostly because once you’re in, the chances are they’ll have your business for decades if not life – that there are yet again some excellent perks to be had.

Most are going for lifestyle extras. HSBC for example, is offering £80 in cash to new student account customers as well as the choice of a £20 Uber Eats voucher or a year’s worth of unlimited next-day deliveries in partnership with ASOS Premier.

NatWest is also going down the food route, with a free tastecard as standard along with £50 cashback upfront.

The more studious Barclays perk is a new offer of access to the Perlego online library for free, representing a £96 annual saving.

And Santander is sticking with the tried and tested Railcard offer worth £30 for one year or £70 for three.

The top overdraft deals come in this year from Nationwide Building Society, Barclays and HSBC, offering up to £3,000 interest-free for the duration of your studies.

Several more offer interest free overdraft facilities for debts of up to £2,000 for those on courses of up to six years, including Lloyds Bank, RBS and NatWest, Bank of Scotland and TSB.

Unsurprisingly though, few are going in strong on credit interest rates. In fact, TSB’s is the only account of note with a generous interest rate of 5 per cent AER.

“Student account providers have not held back with tweaking perks this year,” says Rachel Springall, finance specialist for price comparison site moneyfacts.co.uk, especially after they put the breaks on in 2020.

“Unlike last year, two banks are offering a free cash incentive upon opening, namely HSBC with £80 and NatWest with £50, which was unheard of in 2020 for student accounts. Since the last academic year there is a better variety of perks, so students can debate which type of account will give them the most value based on their spending habits.”

“The pandemic’s impact may have caused some anxiety amongst prospective students who are preparing to live away from home for the first time in their lives,” she adds.

“If they have money concerns, they would be wise to speak with their family and friends for advice in the first instance, but also take some time to find a decent student account to stand by them during their years of study.

“Taking advantage of free mobile apps to budget and keep an eye on expenses on the go, such as with Moneydashboard, is also wise. There are undoubtedly some decent account perks this year, but students must check the overall package before they commit.”

Those looking to save some cash on study materials could find Barclays’s deal with Perlego makes the most sense, particularly when it is coupled with an attractive interest-free overdraft of up to £3,000.

“Nationwide Building Society would be a cheaper alternative for students looking to travel abroad as it does not charge for overseas use and offers a £3,000 interest-free overdraft,” Springall suggests.

Students who expect to travel across the UK during their years of study will find NatWest has not extended its Coach Card add-on, but Santander still has its far more lucrative Railcard.

Compared with Santander though, NatWest is offering a more generous overdraft within the first few years of study as well as that tastecard, worth £34.99 a year.

Meanwhile, NatWest is issuing an urgent scam alert as over three in four students are actively targeted by criminals using a common delivery service scam.

Targets receive a text message advising them that an attempt was made to deliver a parcel and there would now be an additional charge. The text message links to a fake Royal Mail or DHL website and requests additional information which will then later be used to scam the student.

HMRC Tax rebate scams are also increasingly targeting students. More than three in five students said they have been contacted with either fake emails, texts and calls claiming entitlement to a tax rebate, NatWest’s data reveals.

Students studying in Exeter, Edinburgh and York are the most likely to be targeted. And although Glasgow students are the least likely to be targetted, the numbers are still high, with over three in five having already been subjected to fraud.