Best student accounts: The banks that give railcards, interest-free overdrafts and £100 cash

School leavers across the country will soon hear their A-level results and those who have applied to university will be told where they will go.

For many, managing their student debt is their first taste of financial independence.

This is big business for banks. As the start of the academic year approaches, they are once again battling to entice both first-year and returning students to open accounts with them, with a raft of new benefits.

Last week Santander ran a raffle for new Edge Student current account holders, with 20 students in the running to win £27,750, the equivalent of three years’ tuition fees, and another 30 students in the running to win £9,250.

Meanwhile, Nationwide is offering £100 cashback and 12 months of £120 Just Eat vouchers with its FlexStudent current account.

This is Money selects some of the best options for students going to university.

Best general student account

Santander Edge Student Current Account

Students who open a current account with Santander between now and September 30 have a chance to win a prize that could pay for three years of tuition fees.

The top prize of £27,750, the equivalent of three years’ tuition, will be awarded to 20 lucky students, with a further 30 students in the running for £9,250, the equivalent of one year’s tuition.

Santander also offers a free 16-25 railcard to students who open a current account.

Normally a Railcard costs £30 a year or £70 for three years. Santander said the average 16-25 Railcard user saves £192 a year with the card.

Students can also get a regular interest-free credit limit of £1,500 in the first to third years of their studies.

Rachel Springall, finance expert at Moneyfacts Compare, said: ‘One of the most lucrative offers comes from Santander with its Railcard. But that’s not all, the company is also running a raffle where 20 students can win a large sum of money to help pay for the equivalent of three years’ tuition fees.

‘In addition, customers can sign up to Santander Boosts to receive cashback, vouchers, offers and prize draws from selected retailers. Coupled with the interest-free overdraft of £1,500 in years one to three, the Edge Student Account could be an attractive option.’

Please note that you will need to use discounts more often to get the most out of the benefits.

Best Student Accounts for Overdraft

The most generous overdrafts this year come from NatWest, HSBC and Nationwide Building Society.

With a regular overdraft, students can borrow money (up to an agreed limit) if there is no more money in their account.

Many student accounts allow students to overdraw a certain amount without having to pay interest on the loan.

They can be a useful emergency solution if, for example, you receive an unexpected bill.

How much overdraft a student will have after the first year of college depends on his credit history. He may have to ask for increases at the end of the year, if they are not increased automatically.

NatWest Student Bank Account

The NatWest student account offers an interest-free overdraft of £500 in the first term of the first year, which can increase to £2,000 in the second term of the first year until the end of the second year. Students can apply for up to £3,250 interest-free from the third year onwards.

Springall said: ‘One of the most popular features of a student account is the interest-free overdraft. This year NatWest is offering the most generous rate and is also giving applicants £100 in free cash and a Tastecard as an added bonus.’

HSBC Student Bank Account

With the HSBC student account you get an interest-free overdraft of £1,000 in the first year. This amount can increase to £2,000 in the second year and to £3,000 in the third year and beyond.

Nationwide FlexStudent Bank Account

Nationwide’s student account allows students to overdraw on up to £3,000 interest-free and without fees in their third year.

Students can apply for a credit limit of up to £1,000 in their first year, up to £2,000 in their second year and up to £3,000 in their third year.

Students must pay a minimum of £500 each semester, continue to pay bills and stay within the agreed overdraft limit.

Best Student Accounts for Free Money

NatWest Student Bank Account

NatWest is offering students £100 cashback for opening a student bank account. They will receive the money within 10 days of opening a NatWest student account.

National FlexStudent account

Nationwide is offering £100 cashback to students who open a FlexStudent account. Students must deposit £500 by 13th December 2024 to receive the £100 cash.

You will receive the £100 within 14 calendar days of paying the £500.

Students who have already claimed a FlexStudent offer or had a FlexStudent or FlexGraduate account on July 15, 2024, are not eligible for this offer.

Best Student Accounts for Other Free Perks

NatWest Student Bank Account

NatWest offers students an annual Tastecard valid for four years, worth £55 per year.

This allows students to get two meals for the price of one, 50 percent off the bill or 25 percent off the entire bill at thousands of restaurants across the UK.

National FlexStudent account

With the Nationwide student account you will receive £120 worth of Just Eat vouchers for 12 months.

The FlexStudent account is also one of the current accounts eligible for Nationwide’s £100 fairer share payment.

Students who have this account and at least £100 in savings in a Nationwide savings account may be eligible for a £100 payout next year, if Nationwide decides to redistribute the money.

TSB Student Bank Account

Students can earn 5 percent interest on the first £500 in their bank account with TSB’s student account.

No interest is charged on balances above £500.