5 Ways To Boost Your Student Bank Account
Managing your cash as a student doesn’t have to be a drag: here are the top tactics to make your bank account pay its way!
Pick the right benefits
Banks are super keen to nab their customers as early as possible – which is why student accounts come with bells and whistles to get your attention. The key is to not get distracted by the shiny stuff!
Whichever perks you plump for is totally your call, but it’s well worth weighing up which pay out most in the long run:
- Freebies, including rail/coach cards, are handy if they’re something you’d buy (and use a lot) anyway – but only if you’re always in credit! Typically worth around £100 or less.
- In-credit interest: free money the bank pays you to keep your cash with them. If you’re always flush, pick the highest rates going. Pay-off: around £20/yr on a £500 balance.
- Fee-free, 0% overdraft: the student account perk than can trump all the others. Agreeing an overdraft in advance (and sticking to the terms) could save you £80/yr or more in fees, penalties and interest on overspending.
Internet banking makes managing your money a doddle – so it’s worth checking what your bank offers (or switching to an account that does what you need!).
Text or push alerts: give you the nod when you’re low on funds, i.e., before you spend more than you have in your account or overdraft. If you don’t have an overdraft, make sure you enable alerts!
Contactless goodies: contactless payments by card, smartphone or smartwatch speed up shopping transactions. Some bank apps are also trialling contactless ATM payments, for when you don’t have your card to hand.
Savings on the fly: from saving your small change on everyday purchases to letting you slide a few quid into a savings account with just one tap, it’s worth checking how easy your bank lets you build up a savings nest.
Make the most of the overdraft
Overdrafts are a way to borrow from the bank if you really need to (for instance, covering unexpected bills or emergencies). If there’s any chance you might ever spend more than you have in your account, a fee- and interest-free student overdraft means borrowing a bit extra won’t cost you anything: that could save you masses over the length of your course!
Overspending without agreeing an overdraft can mean paying the bank interest on the extra cash you spend, being charged every day you’re overdrawn, and being stung with a penalty fee every time the bank refuses to honour a payment. Agreeing a 0% overdraft works out massively cheaper: safer to have one than not!
If you’re certain you’ll never need to overspend, and you’re totally on-top of your finances, it can still be worth getting the largest overdraft you’re eligible for and putting the cash into a high-interest savings account instead. That way, you can use your free overdraft to make money.
Double-up on accounts
While you may not be allowed to open a second student bank account, it’s perfectly legit to have multiple current accounts. In fact, having a couple of accounts on top of your student deal makes a lot of sense: you can then play each one to its strengths.
Start by putting cash for bills and important costs in one account – just ensure you keep enough money in there to cover your direct debits each month. You then use a second account for your daily spending: that means you never have to worry about accidentally spending your rent! If you prefer, stick your spending money on a prepaid Mastercard, like Monzo or Revolut, and you won’t have to worry about going overdrawn (because you can’t!). Got cash left over? Stick it in a savings or current account that pays top interest or a decent opening bonus.
Load-up on apps
There’s a growing number of online-only banks and apps that can help you really nail down your money skills – plus, if your bank doesn’t do everything you want it to, third-party offerings can help plug the gaps. Just make sure you peruse the small print and security before signing up!
Money dashboards: connect to your bank accounts to give you an overview of what cash you have, where it goes, and any patterns in your spending and saving. Take a look at Spendee or OnTrees to see how they work.
Auto savings apps: you give them read-only permission to your bank accounts and they identify how much you can afford to save without missing the cash. They then transfer that to a savings account – no effort needed on your part. See Chip, Plum or Cleo.
Budget trackers: not as automated (or nosy) as the dashboards, but a solid way to track your money – try the Mobills app.
Money movers: plenty of bank apps let you shuffle cash between your friends and family, with third-party apps also throwing bonus offers into the mix. Either way, it makes settling up shared bills easy as pie. Think: Payfriendz or Circle.
Loads of tools and tricks make money management easier than ever. Just pick the bits that work for you, stick to the terms, and keep switching to the best deals. Simple.
Photo by Fabian Blank on Unsplash
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