A lesson on student finance

For many young adults, heading off to university will mark the first time they have lived away from home – and the first time they have had to look after all their finances.

Some of them will get some help from the Bank of Mum and Dad, but the day-to-day running of their finances will be down to them.

It can be a huge culture shock, but following a few tips can help students make their pounds stretch a little bit further, and getting the right bank account before arriving on campus is well worth doing.

If you are heading off to uni for the first time, the first thing to do is set open a student bank account. This is one of the few times in your life that you can have the banks in the palm of your hand. They are keen to sign you up early in the hope that you’ll remain loyal to them in later life, when they can try to flog credit cards, mortgages, loans and investment products to you.

But don’t sign up for a student account before you’ve checked out what they have offered. Many of them come with nice little extras, such as home-contents insurance, railcards, high-street discount cards or foreign currency, but make sure you opt for offers that are relevant to you. Matt Sanders, of, said: “While these incentives may sound tempting, if you’re not going to use them then they’re not worth having.

“Others may offer freebies such as toys, games, vouchers, or electronic gizmos. While the thought of ‘something for nothing’ may seem attractive, such ‘gifts’ are probably not the best thing to base one of your most important financial decisions on.”

Charlotte Nelson, of said: “Many banks offer attractive features to students as many will become loyal customers after their student years. But whilst benefits such as a free railcard might be tempting, it is always wise to look at all aspects of the account.”

In particular, consider the size of the interest-free overdraft on offer if you – like many students – expect to spend much of your time in the red. As with all overdrafts, you’ll need to pay it back at some point, so don’t go mad and blow it all just because you can, but a decent interest-free facility can prove very useful.

Mr Sanders said: “Most student accounts will offer an interest-free overdraft, and this will usually increase each year throughout your degree course.

“You should also be aware that you may not get the maximum interest-free overdraft advertised, as your individual limit will be based on your credit score.

“However, some banks do guarantee to give you this upper limit, so always check whether the overdraft limit on offer with the student bank account is ‘guaranteed’ or only ‘up to’.”