Note also that it is a condition of most student accounts that you use that account as your main current account, and that your student funding is paid into this – in other words, you cannot have more than one student account (although you could, for example, have a separate savings account).
NUS is often asked which bank we recommend. We don't recommend any specific banks, but we do suggest students consider a number of factors when deciding on which bank to go with. Remember that banks put a lot of effort into attracting students as many will go on to bank with that company for the rest of their lives – so do your research and don't get swayed by free gifts alone.
1. Convenience and service
Some banks will have branches on campuses, others nearby. If you prefer banking in person, check out where your nearest branches will be – and remember that certain banks can be thin on the ground in certain parts of the country.
If online or telephone banking is more your thing, again check out how good this service is and whether it meets your needs.
2. Overdrafts
One of the key attractions of student accounts is usually the generous overdrafts given to students, which will be interest free whilst they study. Some banks will offer more than others, and often the interest-free limit will rise with each year of study.
These can be hugely useful whilst you study as money can be tight – but you do have to pay it back of course. Check out what the bank's policy is for you to repay this money after graduation or for the interest-free limit to be reduced – this often happens in stages in the years after you graduate, but you don’t want to get a nasty surprise.
3. Other services
Many student bank accounts will give you a student credit card or other such services. These can be useful but do of course be careful as the money does have to be repaid, and interest rates will be far higher than most other forms of borrowing.
You might also get preferential savings account interest rates, free travel insurance, or cheaper foreign currency exchange as part of your student account. Check out what each bank offers, what the conditions are and consider what will be most useful for you.
4. Bank charges
Although charges have become generally more transparent and less costly in recent years, unauthorised overdrafts, foreign cash machines and the like can still cost you more than you would like. Look at the bank's charges policy and at least be aware of the costs you can incur.
5. Ethics
Finally, many students will want to choose a bank which has a strong ethical investment policy. Some banks definitely have better reputations than others, so see what they say about where they put your money.