Student Bank Accounts

It is important to shop around and make sure the bank or building society you choose is right for your needs. Don’t be swayed by offers of free gifts or cash. Remember you can have a variety of accounts with different banks.

What’s the difference between a bank and a building society?

• Building societies are owned by the people who have accounts with them, and are also known as mutuals. This means they can usually offer better rates, as they don’t have to make a profit, but they are also limited as to how much money they can borrow from other places.
• Banks are owned by other people, usually publicly-owned and floated on the stock market.

Traditionally banks offered current accounts, and building societies offered mortgages and savings accounts, but these days most institutions offer most things. To make things easier we’ve referred to banks below, but this could also mean building societies.

Important factors when choosing a bank includes:

• The location, particularly if you are likely to visit your branch on a regular basis. Banks are usually open office-hours only, so you’ll need to find a bank close to work or college.
• You should find out how many cash machines you’ll be able to take money out without being charged. Different banks have different policies about charging for using other banks cash machine.
• Access to telephone and internet banking. It’s useful to be able to check your finances in your pyjamas.
• Cashpoint functions: Can you deposit money? Can you get a printed mini-statement? Can you order a cheque book?

The MoneySupermarket.com website allows you to compare high street bank accounts and work out which would be best for you.

Internet and telephone banking

Most banks offer internet banking. You can even have an account run almost completely online through companies like Egg, Smile and Cahoot.

If you do not have time to go to a branch during normal business hours, then internet banking is useful. You can carry out the majority of your banking whenever it suits you. You also have instant access to your statement, so you don’t have to wait until the end of the month for a breakdown of how you’ve spent your money.

Telephone banking is another option is you don’t have regular access to the internet. This is where you can carry out banking functions over the phone. Again most banks offer a form of telephone banking.

Current accounts

Current or bank accounts are the most popular ways of organising day-to-day finances. When you open a current account, you will usually receive a cheque book, a cash card and, if you are over 18, you will have the option to apply for an overdraft. Generally, money is credited to your account from whatever source you receive your income (salary if you are working) and then payments or withdrawals are made from the pool of money in the account.

Direct debits and standing orders can also be set up for monthly outgoings (such as bills or rent). Current accounts do not pay a significant amount of interest when you are in credit, so it’s worth moving any excess money to a savings account.

Statements

Statements show the transactions that have taken place in your bank account over a pre-determined period of time, usually a month. Always check your statements to make sure all the details shown are correct and contact your bank if you have any queries with the transactions shown.

How to open a bank account

Anyone can apply to open a bank account, but banks don’t have to accept you. There’s nothing you can do about this, unless they are discriminating against you on the grounds of race, sex, disability, religion or sexuality.

Two forms of ID such as a passport and utility bill will usually have to be provided to open a bank account. If you don’t have sufficient ID, they may accept a letter from a responsible person.

You may find it difficult to open a bank account if you are on a low income or have made credit history. In those circumstances, you may be able to open a basic bank account.

How to change bank accounts

You should be able to automatically move your debit debts from one account to another, but remember to tell your employer that you are changing banks so they can arrange for your salary to be paid into your new account. People often stick with the same bank for all of their life, but by shopping around you can get a better deal.