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Monday, 14 September 2015

Banks get top marks for student satisfaction

1 in 3 students score their bank at least 9 out of 10 for satisfaction
  • NatWest top of the class, but Santander most popular
  • Majority stick with their existing bank when they go to university
A third of UK students are extremely satisfied with their bank, according to a new survey by money advice site – yet many risk missing out on better deals.
The survey of 1,097 students reveals the most popular banks in which to stash cash at university, along with how highly they were rated.

Top 5 banks for overall student satisfaction:

  1. NatWest (6.7)
  2. Santander (6.65)
  3. RBS (6.64)
  4. The Co-operative Bank (6.47)
  5. Halifax (6.2)
Santander, Save the Student’s best value student account this year, is also by far the most popular bank among students: 23% of those surveyed bank there. Second and third are NatWest (16%) and Lloyds (13%).
Only 1 in 5 are currently looking to switch their account, so it appears banks are successfully wooing – and winning – the student buck, especially through new technology. Third-year Savannah Turner comments, “You now get a contactless card which makes you feel like a wizard when you're buying a McDonald’s!”.
Not all students are so pleased with their bank, however. “It can be hard to get advice, especially as most banks have premium rate phone numbers and most students can only call from mobiles,” 4th-year Becky adds.

Top 5 reasons for choosing an account

  1. Already banked here (54%)
  2. 0% overdraft (41%)
  3. Friends or family bank here (36%)
  4. Freebies or discounts (33%)
  5. Online or smartphone access (28%)
With the average student short £265 a month after the Maintenance Loan, banks play a very important role in bridging the gap.

Savannah also says, “It's hard to manage money because I'm really poor and Student Finance do everything physically possible to be difficult, but the overdraft is a beautiful thing.”

An interest-free overdraft is a huge privilege only available to students, but a third of those surveyed don’t even have a ‘student account’ – meaning they miss out on cost-free borrowing.

On the other hand it could indicate financial discipline. Postgrad Emma explains: “I opted out of the student account because I didn't want to allow myself to go overdrawn.”

Jess adds: “I chose my own overdraft limit of £200. I went overdrawn quite a few times but I think the higher the overdraft limit the more I would've gone in to it. Two of my housemates had £2.5k overdrafts and used them to go to America!”

Owen Burek, Editor-in-Chief at Save the Student:

“It’s actually a very nice surprise 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.

If you’re lucky enough not to need the cash, still take what you can and stick it in a tax-free ISA to earn interest on it!

Just one key warning: 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.”

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