Banks are ramping up efforts to attract new students with offers of up to £220 in freebies, food vouchers, and cashback. Freshers heading to university this autumn can benefit from free cash, Deliveroo or Just Eat vouchers, rail discounts, and interest-free overdrafts worth thousands of pounds.
Improved Offers Compared to Last Year
The latest comparison from Moneyfactscompare.co.uk shows several high street banks have improved their offers compared with last year. Lloyds, Nationwide, and NatWest are among those sweetening the deals.
Lloyds has emerged as one of the biggest winners, boosting its package to include up to £120 in Deliveroo vouchers alongside £100 in cash for eligible new customers. Nationwide is offering £120 of Just Eat vouchers and £100 cashback, while NatWest has increased its cashback from £85 to £100 and continues to include a four-year tastecard offering restaurant discounts.
Other Banks' Offers
Santander is instead targeting students who regularly travel home by offering a free four-year 16-25 Railcard, worth around £115. TSB is paying 5% interest on the first £500 held in the account.
Moneyfacts says students should resist being dazzled by welcome gifts alone and instead focus on the size of the interest-free overdraft, which could prove far more valuable over the course of a three-year degree. The most generous borrowing limits are offered by NatWest and Royal Bank of Scotland, where students can build up an interest-free overdraft of up to £3,250 by the end of their course. HSBC and Nationwide follow with limits of up to £3,000.
Advice from Moneyfacts
Caitlyn Eastell, personal finance analyst at Moneyfactscompare.co.uk, said students should look beyond the headline incentives. She said: "Free cash and vouchers can make one student account stand out from another, but it's important students compare the overall package before being swayed by incentives. An interest-free overdraft could provide greater value over the course of a degree than a one-off freebie."
She warned that although generous overdrafts can provide a valuable financial safety net, students should remember that every pound borrowed eventually has to be repaid. Eastell added: "Providers are offering a wide range of incentives to attract student customers, including cash bonuses, travel discounts and food delivery vouchers. Those travelling home regularly could save a significant amount with Santander's free 16-25 Railcard, while students who frequently order takeaways or eat out may get more value from NatWest's four-year tastecard or the food delivery vouchers available from Lloyds Bank and Nationwide Building Society."
She also urged students to make use of budgeting tools built into banking apps and any financial support available through their university.
