There are loads of exciting things about going to university – venturing off on your own to a new place, meeting like-minded people, maybe living away from your parents for the first time. Sorting out your bank account, however, is not one of those things. It’s dull, but if you get organised and find the right one, you’ll make life a lot easier once you start spending in your first term.
Why you need a student account
You might already have a bank account, but your financial needs and priorities will change once you’re at university. Student current accounts are special because they’re tailored to your new situation, with perks and benefits specific to the account type. They usually have a healthy overdraft with 0% interest, so you can borrow without paying a fortune, and you might even get a great freebie like a railcard or insurance.
When you can get one
You can apply for your student bank account as soon as UCAS sends you an offer letter, conditional or unconditional, which you’ll need to take with you, along with ID, to a branch of your chosen bank. It doesn’t matter if you’re signing up in the branch closest to home, as you can still do your banking wherever you end up.
How are you going to use it?
The most common advice out there is to go for the account with the biggest possible overdraft. This is great, if you’re definitely going to need it and you’re confident you can pay it all back before you graduate, or soon after. If an overdraft isn’t your priority, you should look at interest rates so you can make the most of your money, the perks available, and the bank’s record with customer service for when you need help or advice.
Compare, compare, compare
Don’t stick with your old bank just for the sake of it, or because it’s an effort. These days, loyalty will get you nowhere when it comes to banking, so get online and start comparing. Make an informed decision and you’ll benefit throughout your degree and beyond. And remember, you can always switch later on if you find a better deal, so do another check around the beginning of the tax year in April, when rates and offers may change. Student Money Saver has the perfect, bang-up-to-date guide to picking the right account to help you choose.
Remember, you’ll be credit scored
Your overdraft might be your first ever loan product, so it’s important to bear in mind that you’ll be contributing to your credit score straightaway. If you burn through your loan quicker than blinking (scarily easy to do during Freshers Week!), this gives banks a bad impression and could well be taken into account when you apply for loans in the future. If you’re fortunate enough not to need your overdraft, dip into it every so often and pay it back promptly, to start building up your credit score.
Don’t do it for the freebies!
Banks will try and lure you with freebies to get you to sign up, so be careful not to fall for it. The perks attached to an account can be a factor in your choice, but really shouldn’t be the main reason you sign up. If you end up struggling to extend your overdraft, or discover that your bank isn’t nearly as helpful as it should be when you’ve got a problem, that little wad of cash or free railcard won’t seem worth it anymore! Compare rates and overdrafts first, then look at the fun stuff.
Think about these things now and you’ll be all set to enjoy the uni experience, the financial side of it all taken care of. Brightside’s student calculator is a fantastic tool for keeping track of your money, and don’t forget there are countless ways to make some money alongside your classes, and top up that account!