As brilliant as Freshers’ Week will be (and trust me, it will be brilliant), nothing can quite match the unchecked thrill of opening your brand new student bank account. With that in mind then, here’s The Saint‘s guide to banking in St Andrews, and to what you should be looking for in a student account.
Why have a student account?
It’s a valid question. Many students will already have a perfectly functional bank account, so why do they need one specifically for students? The answer is simple: student accounts often come with many more benefits than the regular current accounts you can open with high street banks. This is because banks know that a high proportion of students who open a bank account with them will remain customers for life, so if they can tempt you now with a few perks then it’s quite likely that they will have your business when you become a multi-millionaire. The banks win, and so do you.
If you’re a student from the UK you should have no problem opening one of these accounts provided you have proof that you’re studying at St Andrews (a UCAS letter should do the trick).
If you’re an international student, things get a little trickier. You can still open one of these accounts, but often banks are less willing to offer the same deals to students who don’t have a credit history or permanent address in the UK. The best thing to do is to check with all of the banks individually to see where you can get the best deal. Choosing the right bank account for you is an important decision so take your time and make sure you do it right. If you’re not happy, you can always switch.
What should you look for?
One of the big attractions of student accounts is that many of them offer a fairly substantial ‘0 per cent overdraft’. For those that don’t know, this is the amount that your bank will let you go ‘into the red’ without charging you. So if you have a £1000, 0 per cent overdraft, you could withdraw £900 even if you have a balance of £0 and, as long as you pay it back before you leave university, the bank won’t charge you. This can be very handy, as it effectively gives you some extra cash on hand to help you through the year.
It’s really important to remember that this isn’t ‘free money’, and you will be expected to pay it back upon leaving university. It’s also extremely important not to exceed your overdraft. Exceeding your overdraft limit can cost a small fortune in fees and potentially negatively impact your credit rating. If possible, treat the 0 per cent overdraft as a safety net and try to stay ‘in the black’ as much as possible.
Another consideration you’ll want to make is whether or not you need a local branch. There are currently five bank branches in St Andrews: Santander; Clydesdale Bank; Royal Bank of Scotland, which allows you to cash cheques for NatWest accounts; Bank of Scotland, which allows you to transact on Halifax accounts although not to open them; and Lloyds TSB (which will be changing to the standalone TSB come September).
Having a branch in town can be useful if, for example, you regularly pay in cash into your account. It also can make it easier to resolve issues in person. Regardless of whether your bank has a branch in St Andrews, however, you can still withdraw cash from any of the many ATMs in St Andrews without being charged and use your debit card (which come standard with almost all student accounts) online and in shops, pubs and restaurants throughout the town and the rest of the UK.
Remember, pretty much all other banking activity can be handled either online or over the phone so don’t automatically restrict yourself to looking only at these five banks.
What to make of freebies?
The other major eye-catching features of student accounts are the freebies, but don’t be lured in by things you won’t use. Santander currently offers a complimentary four-year railcard, worth £30/year, with every student account. These cards are a must-buy for anybody who travels to St Andrews by train as they can regularly save you over 30 per cent off your train fare which, over time, can really add up. If you were going to buy one anyway, this could save you £120 over the lifetime of your degree, so this isn’t something to be sniffed at.
Other banks offer similar benefits, but be warned: it’s tempting to be wooed by the promise of free MP3 downloads or that sweet-looking portable speaker, but these should really only be seen as a sweetener, not a deciding factor in your choice. Unless the freebie is something that will see a lot of use, then it’s probably not worth it. Trust me, I went for that portable speaker. It’s rubbish.
How to open an account
If you already have an account with a bank or building society in the UK, you can usually just ask them to convert your existing account to a student one, which means you don’t have to open a new one and you get to keep your sort code and account number the same. You should double-check that if they do this you will still receive any perks advertised for new student account openings.
Some students may find it useful to run a student account separate to their existing bank account – and this would mean that when you inevitably lose your card on a night out, you still have access to some money!
If you are opening an account with a bank with which you do not have an existing customer relationship, they will require you to provide some identification. Under UK law, a bank has to prove your identity before they can allow you to transact, both for your security and to prevent money laundering. Having the right identification with you when you attempt to open an account makes things significantly easier.
In general, if you are from the UK or EU, two of either a passport, driving licence or ID card will generally suffice. Students with UK addresses should ensure that the address they give the bank when opening their new account matches the address on the ID, which would normally be your parents’ address. This makes things easier all round, as you will also most likely be on the voters’ roll there, meaning an enhanced credit score and a greater chance of being approved.
Those without UK home addresses will require proof of where they are living whilst at university. A ready-made letter can be downloaded from the St Andrews E-vision system on the ‘Current Students’ homepage, which is personalised to you and lists your term-time address. Most banks will accept this as proof of residence, along with your passport.
For those travelling from further afield, especially the USA, you should note that unfortunately your driving licence is not accepted as a valid form of ID (you’ll also find this when trying to purchase alcohol). You should ensure that any visas you have been granted by the UK border authority are also presented to the bank upon account opening.
Some more things to remember
Always. Read. The small print. Reading something you don’t fully understand and puts you to sleep is great practice for university essay reading. It generally goes without saying, but you should be thorough when looking at opening a bank account, particularly with regard to overdrafts and charges. Here are some reminders of things to look out for:
- Check whether the overdraft limit quoted on a bank’s website is guaranteed, or whether it’s assessed on a case by case basis. ‘Up to £3,000’ could mean significantly less than that.
- Make sure you’re eligible to open an account – it sounds silly, but some banks won’t let you open a student account unless you’re over 18.
- Take note of the charges that will apply should you (heaven forbid) exceed your overdraft limit.
- If you are an international student, some banks may only offer you a “basic” account. These accounts are as good as any normal bank account, but some restrict you to using cash machines of that bank or partner banks (for example, the Bank of Scotland Cash Account will only allow users to make withdrawals from Bank of Scotland, Halifax or Lloyds TSB cash machines), so consider how likely it is that you may find yourself unable to use a cash machine of the same bank before agreeing to go ahead with such an account.
- Some accounts require a certain amount of money to be deposited per term in order to retain their benefits. This rarely applies to student accounts, but many banks will want to make sure their account is the one you use as your primary account (i.e. the one your student loan is paid into). Look out for this, as you could risk getting slapped with charges if you neglect to meet the account’s conditions.
- Many banks also offer credit cards to go with their student accounts. These can be a great way of keeping track of your spending, and if paid off in full each month can be an excellent way of building a credit score. Beware though, if you don’t pay the full amount you owe each month you can expect to pay very high levels of interest. Don’t spend what you don’t have. If you have to break that rule, it’s much better to use your 0 per cent overdraft than to fall into a spiral of credit card debt. Use credit cards sensibly and they can be a great financial product, but approach them with caution.
For more information on student bank accounts, and a handy comparison of the options available from different banks, check out Money Saving Expert’s handy guide. For more St Andrews-related information, take a look at the University’s guides for UK students and international students.