Lana Oconnell
Santander offers a 123 Student Current Account with an interest-free overdraft facility. The overdraft allowance depends on the year of study, and the bank offers a four-year Santander Railcard with the account. While the account offers benefits such as travel perks, it also has high funding requirements. Students can use the bank's cost calculator to understand the costs associated with using an overdraft facility. Santander also offers a monthly reducing overdraft plan to help students gradually pay off their overdraft balance. The bank may agree to put interest charges on hold for a while, allowing students to clear their overdraft balances while still using their accounts.
| Characteristics | Values |
|---|---|
| Overdraft type | Arranged overdraft |
| Overdraft balance | Up to £1,800 |
| Interest rate | 0% |
| Repayment options | Monthly Reducing Overdraft, Breathing Space, Paydown |
| Repayment period | 2 years after graduation |
| Account type | 123 Student Current Account, Edge Student Current Account |
| Additional benefits | Santander 16-25 Railcard, no monthly fee, overdraft alerts |
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What You'll Learn
Santander's 123 Student Account
Santander offers a single account dedicated to students in the UK, the 1|2|3 Student Current Account. This account has several benefits, including a free 4-year railcard, which offers reduced prices for rail fares, as well as discounts and cashback with Santander Boosts.
The 1|2|3 Student Current Account also provides an interest-free overdraft facility of up to £250, with higher limits of up to £2,000 available in subsequent years, depending on the length of your studies. This overdraft facility is free of charge for the duration of your student account, but fees may apply after graduation, depending on the type of account you transfer to.
To open a 1|2|3 Student Current Account, you must meet certain requirements. Firstly, you need to prove your status as a student or apprentice, which can be done with a student ID card or a 4-digit UCAS status code. Additionally, if you are applying for an overdraft, you will need to submit to a credit search. It is important to note that international students may not be eligible for this account due to the UK address requirement.
If you already have a Santander account, you may need to close or transfer it to make the student account your main bank account. Once you have opened the account, you will need to pay in at least £500 per academic term to retain its benefits.
Regarding paying off your overdraft, Santander offers a few support options:
- Monthly Reducing Overdrafts: Santander can work with you to create a plan to gradually pay off your overdraft balance. They will ensure the plan is affordable and may agree to put interest charges on hold during this period.
- Breathing Space: This option gives you time to contact a third party to develop a repayment plan. Santander will suspend any interest and fees during this period.
- Paydown: This is a monthly repayment amount that clears the overdraft. Santander will block the account so you cannot use it during this time.
In conclusion, the Santander 1|2|3 Student Current Account offers a range of benefits, including travel perks and an interest-free overdraft, making it a good option for students looking to manage their finances effectively. However, it is important to carefully consider the high funding requirements and eligibility criteria before opening an account.
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Graduate account options
If you have a Santander student account, you will be automatically switched to a graduate account when you finish your studies. Santander's graduate account is called the 1|2|3 Graduate Current Account. This account has a two-year validity period. After that, you will be automatically moved to a standard current account.
The 1|2|3 Graduate Current Account offers some student-friendly perks, such as a free 4-year railcard, which gives you reduced-price rail fares, and offers, discounts, and cashback with Santander Boosts. The account is paperless and offers online banking features, and you can link and use your cards on mobile for contactless spending.
The graduate account also offers an arranged overdraft limit of £2,000. You will not be charged any interest on up to £2,000 in the first year and up to £1,000 in the second year. The interest rate if you exceed your overdraft limit is 39.94% EAR (variable) representative.
If you are looking to switch to a graduate account from another bank, you can only do so if you already had the bank's student account. For example, if you have a Nationwide FlexStudent Account, it will automatically be switched over to a FlexGraduate Account once your course is over.
If you are looking for graduate accounts with the longest interest-free overdraft period, you might want to consider the Nationwide FlexGraduate Account or the Barclays Higher Education Account.
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Arranged overdrafts
An arranged overdraft is when your balance is below zero but within an agreed limit. This means that you are borrowing money from the bank. You must agree on the limit with the bank before you can use it. When you try to make a payment that would take you into an unarranged overdraft, Santander decides whether to allow or stop the payment based on your personal circumstances. If the payment is allowed, it will take you into an unarranged overdraft. Santander does not charge fees for allowing or refusing a payment due to lack of funds.
To stay on top of your account, it is recommended that you check your balance regularly. Online and mobile banking can help by letting you access your banking information wherever you are. Santander also offers overdraft alerts, which can be sent to your phone. These alerts can notify you when your account uses your arranged overdraft, if a payment has been refused, or if upcoming direct debits might be refused due to lack of funds.
If you want to reduce or remove your arranged overdraft, it is important to check your current balance before applying. Removing or reducing your arranged overdraft could put your account in an unarranged overdraft position, leading to refused payments and bills. Staying in an unarranged overdraft may also negatively impact your credit score over time.
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Monthly repayment plans
If you have a student overdraft with Santander, you will need to repay it when they ask you to. To avoid any charges, it is best to check your current balance before applying to reduce or remove your overdraft. You can do this by checking your balance regularly via Online and Mobile Banking.
If you are struggling to pay off your overdraft, Santander offers a monthly repayment plan called 'Paydown'. This involves agreeing to a monthly repayment amount that will clear your overdraft. During this time, your account will be blocked, and you will not be able to use it. The repayment amount is tailored to your individual circumstances and is decided upon after an affordability assessment.
If you are worried about your finances, Santander has specialist teams that can support you. They can work with you to develop a repayment option that is affordable for you. Acting early can help you gain more control over your money and prevent your situation from worsening. You can also fill in a budget planner to gain a clearer understanding of your expenses.
It is important to remember that an overdraft is intended for short-term use and can be expensive in the long term. Regular overdraft use can lead to a cycle of debt, and going over your arranged overdraft limit can impact your credit file.
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Alerts to avoid charges
Santander offers several alerts to help you avoid charges. If you have a current account, you will be automatically registered to receive some account alerts to help you avoid charges or to notify you about certain activity on your account. These alerts are sent by text, push notification, and/or email.
You can opt to receive alerts when:
- You make a payment that may take your account into an unarranged overdraft.
- The amount available to spend on your credit card falls below 10% of your credit limit.
- You make a payment that takes your account within £50 of your overdraft limit.
- You make a large payment greater than an amount you’ve set.
You can also set up new alerts by using Online Banking. Log on, click ‘Account services’, then ‘Account alerts’ on the left-hand side and follow the steps.
If you are using your overdraft for long periods, you may receive a letter or email from Santander with options on how to break the cycle. They will also provide tips to reduce or avoid overdraft costs.
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Frequently asked questions
You can pay off your student overdraft with Santander by switching to a graduate account. This will give you a 0% overdraft for 2 years, after which your account will switch to a regular account.
You can ask to reduce your overdraft limit at any time. Acting early can give you more control over your money and prevent things from getting worse.
An arranged overdraft is when your balance is below zero but within an arranged limit. This means you are borrowing money from the bank. You must agree on the limit with the bank before it is available to use.
An unarranged overdraft occurs when your account goes overdrawn without an arranged overdraft in place or if your account goes over your arranged overdraft limit.
The Santander student account offers an interest-free arranged overdraft and a free 4-year Santander 16-25 Railcard.
