What You Should Know About the Santander Student Account

The Santander student account has useful benefits, but some drawbacks as well. Keep reading to learn if it’s the right student account for you!
A stack of books obscures a student's face.

Hey you—yes, you reading this: well done. You’re taking proactive steps for your finances like researching student accounts, and that’s a good indicator that you’re already on the right track. One of the best ways to ensure your financial comfort in life is by learning while you’re young, and opening a student account is a great way to gain hands-on experience managing your finances.

However, there are a lot of student accounts to choose from. It can be hard to know which is the right fit for you. Here, we’ll take a closer look at one offering in particular: the Santander student account, also known as the ‘123 Student Current Account.’

What are the Benefits of the Santander Student Account?

The Santander student account has several great features, so let’s distil that offering down to the main benefits you should be aware of:

Interest-Free Arranged Overdraft Accounts

When you open the 123 Student Current Account from Santander, you’ll automatically receive an interest-free overdraft account. The overdraft allowance available depends on your year of study. The breakdown for those overdraft allowances is as follows:

  • Years 1-3: £1,500
  • Year 4: £1,800
  • Year 5: £2,000

Regardless of your year, the interest rate will remain at 0%. If your account is overdrawn, you’ll have the opportunity to repay the overdraft without taking on any interest. This can make the overdraft account a valuable tool for learning to manage your finances and credit obligations.

However, keep in mind that the terms of the account allow Santander to reduce your overdraft limit at any time if they aren’t satisfied with the way you’ve managed your overdraft account. If you don’t feel comfortable with the allowance available to you through your account, you can request to have it lowered at any time.

Want to know more about overdrafts? Check out our post, ‘What Happens if I Can’t Pay My Overdraft in the UK?

Mobile Banking App and Overdraft Alerts

While mobile banking apps are commonplace among even smaller banking institutions, it’s nevertheless a good feature for any financial account. Santander’s mobile app allows you to carry out essential functions like transferring money between accounts, making payments, freezing your debit card if it’s lost, and much more.

Santander’s mobile banking app is highly rated on both Android and iOS app stores:

  • Apple iOS App Store Rating: 5 stars with 2k reviews
  • Google Play/Android App Store Rating: 3.8 stars with 138k reviews

Additionally, you’ll receive helpful overdraft alerts to your phone. You’ll receive an alert any time your account uses your arranged overdraft, if a payment has been refused, or if your upcoming direct debits might be refused for lack of funds. This can help you avoid missing payments and potentially damaging your credit score.

Ultimately, these tools will be as valuable as you make them. By utilising them effectively, you can gain a deeper understanding of your current financial picture and develop health strategies for using money.

Santander’s mobile banking app is highly rated on both Android and iOS app stores:
Apple iOS App Store Rating: 5 stars with 2k reviews
Google Play/Android App Store Rating: 3.8 stars with 138k reviews

Useful Travel Benefits for Students

The 123 Student Account will give you access to a four-year 16-25 Santander Railcard. This could save you as much as 33% on rail travel throughout the UK while you visit family, travel for holiday, or attend events for your studies. In addition, the Santander student account features fee-free international withdrawals at Santander cash machines, making the account an attractive option with ambitions for travelling.

What are the Drawbacks of the Santander Student Account?

The features of the Santander student account are broadly good, but it does have a few drawbacks that are worth touching on:

Large Minimum Funding Requirement

The Santander student account’s required £500 pound contribution per academic term is quite large, especially when you consider that money tends to be tight for students. If your university runs the standard of three 12-week terms, that could be another £1,500 you have to account for each academic year. 

Not all student current accounts have a minimum funding requirement. Similar accounts, such as the Lloyds Bank student account, offer a similar overdraft allowance, yet don’t have a minimum funding requirement.

Limited Eligibility for the Account

The Santander student account isn’t available to non-traditional students, international students, or students in graduate programs. Additionally, if you’re beyond year one of your studies, you won’t be eligible to enrol in the Santander student account unless you transfer an existing account from another bank. While the Santander student account has a lot of benefits, it’s unfortunately not available to many students who could benefit from it.

Benefits Are Tied to Enrolment

If you decide to end your studies, benefits like access to your interest-free overdraft allowance may stop. While you’ll receive a two-month notice before changes take place, it can still put you in a situation where your current account isn’t providing the value it once did.

You’ll also lose access to these benefits if you graduate from your program. Graduates used to be able to switch to a 123 Graduate account, but that product and a number of others in the 123 family are no longer offered by Santander.

Is the Santander Student Account Right for You?

The Santander 123 Student Current Account is definitely an option worth considering as you prepare your finances for your educational journey. Its benefits like convenient arranged overdraft accounts and travel perks make it a good option for many UK students, especially if you’re interested in travelling domestically or internationally. However, the Santander student account’s high funding requirements will make you want to carefully consider whether this account is the best fit for you.

Keep Up the Good Work — Dig Deeper Into Your Finances With Pave

Opening a student account is a great step towards becoming the master of your own finances. However, as you continue your education, it can be hard to find the time to monitor your finances and things like your credit score—especially if you don’t know where to start. That’s why we made the Pave app.

Pave keeps an eye on your upcoming payments, reports timely payments to credit reference agencies to build your credit score, and gives you personalised advice to build your credit score. With Pave helping you take steps to build your credit score, you could be in excellent shape by the time you complete your studies, making financial products like loans, credit cards, and even mortgages more accessible.

To learn more about building your credit score the right way, download Pave from the App Store or Google Play today.