Which bank?

edrob_2

My daughter is a student in London, just finished year 1. She is living in London now full time (ie not in "student" accom). At present she has a current account with a regional building society where we live. This is not very convenient for her!
Last year she applied for a student bank account with a couple of banks but was turned down. This may be because she put her income down as zero rather than including her student loan as income.
She has got through her first year without going overdrawn, mainly due to me helping her manage her cash flow particularly the highs and lows of the student loan coming in for uneven amounts at the wrong time. Anyway she got to the end of year 1 with no debt other than the student loan.
I'm really trying to encourage her to avoid an overdraft if at all possible, so am hoping that she can do this for the next two years! Am i being unrealistic?
Anyway, the main advantage of student accounts seems to be the interest free overdrafts (which obviousluy aren't interest free when you've racked up a load of debt, and have finished uni)
Most of the good non-student deals are for switching, but i don't think she will qualify for these as she doesn't have a salary paid into her account or direct debits going out.
So can anyone advise of the best new bank account for people not switching?

xylophone

She can try again for a student account - she doesn't have to use the overdraft facility.

Will she be working during the holidays?

https://www.studentmoneysaver.co.uk/article/student-bank-account-guide/

Don80

Hi

If your daughter has internet banking, I think the only reason her building society might be inconvenient in London would be lack of branches? Does she really need to use branches these days?

When applying for a current account you do need income, putting 0 is almost certainly the reason she was declined. She could add up her student loan payments, plus any money from family - all that may count as income when you are a student. If applying in branch she would be able to explain that to a staff member.

Most banks offer student accounts, many with freebies that are not really worth enough to be the reason you change bank. If she is opening an account, don't get sucked into staying with that bank after she's graduated - banks almost rely on snagging your business when you are a student/child and you never switching. It works because most people don't change their bank either because they believe it is too much hassle, or are unaware of all the options.

edrob_2

Thanks. Having a local branch would be helpful for 1. paying in the occasional cheque and 2. if she loses her card.
The only worthwhile benefits of the student account seems to be the overdraft. If she doesn't need this I'm wondering if there are any good deals for people opening a new account (not student) but not switching. Have looked around but can't see anyhting much. It seems to be all about people switching.

gt94sss2

edrob wrote: »

Anyway, the main advantage of student accounts seems to be the interest free overdrafts (which obviousluy aren't interest free when you've racked up a load of debt, and have finished uni)

Its worth your daughter reapplying for a student account - most of these accounts continue to offer interest free overdrafts for several years after graduation.

I think its a better option than going for a 'non student' account.

edrob wrote: »

Thanks. Having a local branch would be helpful for 1. paying in the occasional cheque and 2. if she loses her card.

From this autumn, banking apps on mobiles will allow you to scan a cheque and pay it in remotely.

System

I'd suggest a Nationwide student account or standard Metrobank account if she wants the branch experience.

She can still use her 'regional' account for spends or bills.

TheGardener

Nationwide Student Account says as a condition..."Be within two months either side of your course start date"
If she didn't open one within the time frame given - Nationwide might not be helpful for a student account.
However - Nationwide's flexdirect is good - if you use a branch you have to use the auto teller/paying in station rather than the 'real' people behind the counter though.

Don80

edrob wrote: »

Thanks. Having a local branch would be helpful for 1. paying in the occasional cheque and 2. if she loses her card.

If she loses her card, I wouldn't suggest going into a branch at all - there should be a number to call the bank 24/7? They would be able to stop the card immediately and issue a replacement. That would be sent to the address they have on file - so as long as they have her London address this should not be a problem. You haven't said which bank/building society it is, but cheques can often be paid in at a post office - or using a paying in book at any bank (though beware charges if you are not a customer at the bank you go to). This may reduce the "urgency" of finding a new bank for you :-)

edrob wrote: »

The only worthwhile benefits of the student account seems to be the overdraft. If she doesn't need this I'm wondering if there are any good deals for people opening a new account (not student) but not switching. Have looked around but can't see anyhting much. It seems to be all about people switching.

You're right, most of the deals are based on switching accounts. That's because banks are trying to get business. Some of these have pay in amounts which your daughter may not meet as she is a student. "Regular" accounts may be an option but again, many have minimum income requirements. Also, the second they realise she's a student, they may want to sell a student account, so you would need to check eligibility AND be clear you don't want a student account.

The other thing would be to check with the new bank about how they would switch. A small regional bank/building society may not be part of the Current Account Switch Guarantee scheme, this doesn't mean that you can't switch, most banks will still help but you may not be covered by the guarantee. The new bank will be able to advise on this.

I would look at:
Bank of Scotland (interest at 2%, no fees, plus cashback offers on spending)
Nationwide (FlexDirect, 5% if she pays in £1000 a month)
Tesco Bank (3% interest plus clubcard perks)
TSB (3% interest, plus £5 a month if she has 2 DDs and another £5 if she uses her card 20 times a month)