Student Bank Accounts 2008/09

Has another year gone by already? We are back again with our guide for student bank accounts this year. We have taken the time to check out the top student bank accounts for 2008/2009 and compare them side by side both for the size of the interest-free overdraught and freebies on offer. The five student accounts on comparison are:

Barclays
Halifax
HSBC
Natwest
Lloyds TSB

Overdrafts

Martin Lewis at Money Saving Expert reckons that your first consideration with a student bank account should be the size of the interest free overdraft and nothing else. This is great for students that need to borrow as you can do so without paying any fees or interest as long as you stay within the banks limits.

There are also benefits for the rare student that has money to spare. Deficit banking is a technique that can be used to earn hundreds of extra pounds a year if you have a positive balance and a good understanding of your money. Simply keep as big a negative balance as you can (within your interest free overdraft limits) and deposit this money in the highest interest savings account you can. You will be earning interest on money that the bank is loaning you for free! Of course care must be taken not to go outside the overdraft limits or you will be charged interest and possibly fees..

Freebies

The major high street banks vary wildly on what free gifts they offer to student account holders. Natwest is by far and away the winner on this front, as their young persons rail card alone is worth £120 .

Conclusion

Ultimately, there is no one account that will suit everyone. If you are likely to be borrowing a lot of money while at university then you should be looking to get the biggest interest free overdraft you can get, Halifax has the largest overall overdraft and the largest starting amount, with £3,000 available in your first year at university.

If you are likely to be in credit and arent interested in deficit banking then you might want to consider the freebies. In our opinion Natwest's 5 year railcard is a great investment and maximum overdraft of £2000 should be plenty for most students so they get our thumbs up again!