In the first ever Student Banking Survey, we uncovered which banks are most popular and – more importantly – which provide the best service for students. It was also an opportunity to ask broader questions about choosing a bank and dealing with borrowing. A huge thanks to everyone who took part!
Making the right choice
Why did students choose their current account?
We’ve got heaps of advice on how to shop for a better student bank account – but what really influences where you choose to stash your cash?
Our survey revealed that more than half of you plump for a student account somewhere you already bank. Access to an interest-free overdraft, and banking at the same place as family and friends, also came out as important factors.
Perhaps most surprisingly, almost a third of you don’t have a student account at all – which means (intentionally or not) you may be missing out on cost-free borrowing and student-friendly banking by sticking with a standard bare bones current account.
Do students switch to get better deals?
Whether it’s an all-singing student account or your regular garden variety, just 1 in 5 of you are currently looking to switch to a new bank.
If you’ve done your research on the best student banks and have all the facilities you need, you’re on to a winner (although it’s still worth regularly checking that you’re on the best deal). If you’re sticking with a bank you’re not happy with, it’s in your interest to switch it for something better.
With just 20% of students saying they shop around for the best deals – and a paltry 5% switching when they do find a better offer – it’s worth asking now whether bank loyalty is paying off for you.
Most popular student banks 2015
Santander – already the best value student account in 2015 – is the most popular bank in our survey: 1 in 5 students already keep their main account there.
NatWest (16%) and Lloyds (13%) came in second and third on the list for the most preferred student banks.
How satisfied are students with their bank?
We also asked students to rate how satisfied they are with their bank, and were pleasantly surprised. The average score was 6.4 out of 10, but almost 1 in 3 gave their bank an incredible 9 or 10 out of 10!
Interestingly the satisfaction scores for the individual banks were very close, but leading the way on putting smiles on student faces this year are NatWest, Santander and RBS.
It’s great to hear most students are happy with their bank, but loyalty also comes with a risk of missing out on better deals – namely getting the highest possible interest-free overdraft.
With the average student short £265 a month after the Maintenance Loan, banks play a very important role in bridging the gap. We wanted to know how much you rely on your bank – such as through an interest-free overdraft – compared to other, costlier types of borrowing.
While the majority – 66% of students – said they weren’t overdrawn at all, the most popular place to borrow extra cash is from family. Only 8% said they were currently overdrawn by £100-£499, compared to 25% who have borrowed that amount from family in the past year.
We also heard from some students who said they’d turned to private or payday loans after they were refused overdraft facilities at their bank, which typically only made their debt worse in the long term. Ensuring your bank covers you for emergency money is one of the main reasons to switch to one that gives you what you need.
Many students get stung after graduating with sudden demands for repayments or additional charges, so make sure you’re well aware of the conditions before signing up for an overdraft.
Do students save?
When it comes to student savings accounts, we found almost half of you hold a rainy day fund with the same provider, a quarter keep it with another bank, and the rest of you (27%) don’t have a savings account at all.
If you’ve managed to scrape together some savings, or have a decent 0% overdraft but don’t need the funds right now, stick the money in a tax-free ISA to earn on it! It also makes it harder for you to blow it all on a crazy weekend full of regrets.