Well done if your child is off to university in a few weeks. But the work’s not over for you yet. Parents need to make sure their student children’s finances are sorted out – and that means ensuring they get the best bank account.
By now, the student loan should be sorted (the first payment will go in once term starts). If not, here’s the information you need. But the bank account might not: and you can help with this worry. It’s in your interest too: the Nationwide says that 40% of parents end up paying off their student children’s overdrafts in part or full. Nationwide’s FlexStudent is highly rated with students, says Which? It offers a £1,000 interest-free overdraft in year one increasing to £3,000 by year three. These limits are guaranteed, not ‘up to’ which some other providers offer. There’s also 1% interest if the account is in credit: good if you have a prudent student child.
For an account with good freebies as well as overdrafts, Money Saving Expert likes HSBC (and see its comprehensive list of student bank accounts here). First year students and apprentices who apply by 31 December get an £80 Amazon gift card and a year’s worth of Amazon Prime Student, worth £39. Students get a guaranteed £1,000 free overdraft in year one and in subsequent years students can increase it by £1,000 instalments. But this isn’t guaranteed. Santander’s 123 Student current account is another option. It offers a railcard giving a third off fares. There’s an automatic £250 0% overdraft, but you could get up to £1,500 for three years although this isn’t guaranteed and will be assessed individually.
Service is also important as well: Which? scores TSB and Royal Bank of Scotland lowest for handling complaints about student accounts (see here). As a parent, as well as getting your child sorted out with an account, you might need to remind them about budgeting. When the student loan payment arrives in their account, it will possibly be the biggest amount of cash any 18 year old has ever had their hands on (the maximum maintenance (for living costs) student loan is £11,354 paid in three instalments). But it has to cover the rent, food and other expenses for a term. There’s lots of useful guidance here if you think that your student child would pay more attention to an online guide than your nagging...
And see Jane's blog on students here and mine on student loans here.