Santander offers £50 incentive for taking out student current account


Updated on 17 April 2012 | 0 Comments

Banking giant Santander has launched a £50 cash bonus for students who take out a student current account.

As students get ready to head off to university this September, many will be contemplating setting up a new current account for when that bounteous student loan arrives.

One account which is now likely to be a pretty attractive option is the Santander student current account, after the bank today announced a £50 cash incentive to students who open or switch to the Santander student current account between 16th April and 30th June 2012.

So how does this deal compare to other high street banks? And what features should students take into account when picking a current account?

Santander’s student account

Santander’s student current account offers an interest-free arranged overdraft of up to £2,000 and cash in your pocket for opening one up or switching.

You are given the flexibility of managing your account online and can receive texts or email alerts when you are nearing your overdraft limit (useful after a hazy drunken night out). The switching service offers an easy transfer of standing orders, bill payments and direct debits from your old bank account.

Incentives

Banks are notorious for trying to lure students into banking with them using offers of large overdrafts and promises of fab freebies.

Some campaigns that come to mind include HSBC’s much-ridiculed offer of ten free CDs when signing up and NatWest's popular free year's railcard. With the cost of attending university set to exceed £9,000 in fees alone, it can be easy toget caught up in incentives like the cash welcome, but keep in mind what you want from the account in the long-term.

Overdraft

Student bank accounts offer quite substantial overdraft facilities, which generally increase year on year and may be the first introduction to borrowing for many young people.

The draw is that borrowing is interest free and serves as an extra boost to the limited student loan. Banks will often advertise their overdrafts using the limit which is only actually available after three years as means to entice you in. So make sure you investigate exactly how much you can go into the red in year one!

And always remember that this is not just free money to spend as you like. The money is just a loan that will have to be paid back.

The catches

Overdrafts are a good short-term borrowing facility, but beware of the catches and pitfalls of readily accepting this offer from banks.

Sometimes arrangement fees and charges for exceeding an agreed limit are unexpectedly slapped on. Also, many students graduate with a balance in the red, maxing out their overdraft by the end of their studies. It is worth researching when you will have to pay the outstanding amount back, when your bank will start charging interest and what the charges are for arranging or going over your agreed overdraft.

Best for you

Of course choosing the right account depends on your financial situation and what you think you can afford. If a large overdraft is attractive the Halifax and HSBC student accounts offer a limit of up to £3,000 in your third year. Take a look at our comparison table for an insight into what some high street banks are offering.

Bank

Minimum overdraft

Maximum overdraft

Incentives

Catches

Santander

£500

£2,000

  • £50 cash for signing up

Unauthorised banking fee is one of the largest at £25 a month on any figure beyond agreed overdraft

HSBC

£500

£3,000

  • 25% off Lonely Planet travel guides
  • Optional student credit card

Have to have a good credit rating to get the full overdraft limit

Halifax

£500

£3,000

None

Rate of 24.2% AER if you go beyond your overdraft limit plus a charge of £28 per month

Natwest

£1,000

£2,000

  • New iPhone, iPad and BlackBerry mobile banking apps
  • Student Discount Card giving you savings on big brands including Game.co.uk, 3 mobile, & New Look
  • Free five-year 'Young Persons' railcard for existing customers (not available for new customers anymore)

You must use your acount consistently to avoid being charged the standard rate of interest on your overdraft

Lloyds TSB

£1,500

£2,000

  • Free Youth Hostel Association (YHA) membership for three years, giving you discounts at around 4,000 hostels around the world
  • 40 free music downloads from eMusic
  • Option to apply for student credit card

Overdraft is tiered in your first year so you will begin with £500 then given the option to increase after seven months

Barclays

£200

£3,000

  • Exclusive deals with Phones4u
  • Discounts on travel insurance 30%
  • Discount on Lonely Planet guides

Overdraft is only interest free up to £2,000. Higher limits incur an 8.9% charge

More on current accounts:

Compare current accounts with lovemoney.com

Santander 123 account vs Halifax Reward account: the most rewarding current account

Five bank accounts that give you something for nothing

Santander 123 current account pays cashback on your direct debits!

Comments


Be the first to comment

Do you want to comment on this article? You need to be signed in for this feature

Copyright © lovemoney.com All rights reserved.

 

loveMONEY.com Financial Services Limited is authorised and regulated by the Financial Conduct Authority (FCA) with Firm Reference Number (FRN): 479153.

loveMONEY.com is a company registered in England & Wales (Company Number: 7406028) with its registered address at First Floor Ridgeland House, 15 Carfax, Horsham, West Sussex, RH12 1DY, United Kingdom. loveMONEY.com Limited operates under the trading name of loveMONEY.com Financial Services Limited. We operate as a credit broker for consumer credit and do not lend directly. Our company maintains relationships with various affiliates and lenders, which we may promote within our editorial content in emails and on featured partner pages through affiliate links. Please note, that we may receive commission payments from some of the product and service providers featured on our website. In line with Consumer Duty regulations, we assess our partners to ensure they offer fair value, are transparent, and cater to the needs of all customers, including vulnerable groups. We continuously review our practices to ensure compliance with these standards. While we make every effort to ensure the accuracy and currency of our editorial content, users should independently verify information with their chosen product or service provider. This can be done by reviewing the product landing page information and the terms and conditions associated with the product. If you are uncertain whether a product is suitable, we strongly recommend seeking advice from a regulated independent financial advisor before applying for the products.