Student Bank Accounts
Why should I get a student bank account?
When it comes to student bank accounts, most banks offer particular current accounts for students, or student bank accounts, and they usually offer an interest-free overdraft, possibly cheaper borrowing facilities and so on with extra incentives and features which they think would be useful for students. Whether you should get a student bank account or not would depend on your personal circumstances, what your priorities are, and what you have in terms of your financial commitments. It's something to look at what student bank accounts are out there, what is available and decide whether it's right for you to have a student bank account or not.
How big will my interest-free overdraft be?
Your interest free student overdraft limit will depend on the bank account you take out. Some banks will give you a certain overdraft amount per year, which adds up slowly to £2-2,500 or more in a year. Some will give you a settlement in the beginning and that will be it for the rest of your university course. In some cases you'll get more if you do a course like medicine and so on because you'll have longer in the course. The important thing to do is just to have again a look around and see what's out there, and each bank will have its own overdraft limit for students.
Should I increase my overdraft if I need more money?
Whether or not you should increase your overdraft if you need more money would be something for you to decide. Once you get to the limit of your interest, the overdraft is possible and the bank will charge you interest, certainly if you go over that limit without permission. Even if you arrange an extra overdraft, they'll probably charge you interest on that as well. So, the important thing to do is to speak to the bank, and find out how much it would cost you. However, if you are getting into financial difficulties and would need to do that, you should possibly talk to the student advisor in your student union or in the university or college about why it is that you're needing this extra money, and whether other sources of finance might be available, and just to help you with financial planning or budgeting or so on, to make sure that you don't get into difficulty.
What happens if I go over my overdraft limit?
What happens when you go over your overdraft limit will depend on the bank and it's policies. Often an initial charge will be applied, plus interest on the amount by which you have gone over the overdraft limit, but it will depend on the bank, and you should check with them to see what consequences arise from you going over your overdraft limit. In some cases, you might be allowed to go over it by a small amount on a one-off, once a month or something like that, before any charges will be applied, but you should check that out, and you certainly shouldn't rely on it. If you're getting into financial difficulty, you should see a student adviser in your student union, university, or college.
What bank charges will I have to pay?
When it comes to student bank accounts, banks will often put charges on accounts if you go over your agreed overdraft limit, or if you don't have an overdraft. If you go into negative funds they may also apply charges for things like bounced checks and so on. There's been a lot of discussion in the media about whether these bank charges are actually legal and whether they relate to the actual cost of the charges that the banks incur and having to apply these charges. If you've got a bank charge and you think it's too much you might want to look at some websites which have details of that sort of issue. But again, those charges will depend on the bank and their policies. So, there's something to check out when you take out an account, especially a student bank account or when you've got an account with them and want to find out what the bank charges are.
