You are here: Home - Saving & Banking - News -

Cashback incentives on student bank accounts shrink

0
Written by:
06/09/2021
Banks have cut back on the upfront cash incentives they offer to students, according to research.

Cash incentives have been a big draw for students over the years and in the past, they have been around £100.

However, this year just three providers offer a cash inducement and the highest available is £80 cashback from HSBC, analysis by Defaqto, the financial information firm, found. This offer includes a £20 Uber Eats voucher or yearly next-day delivery with ASOS Premier.

Natwest and RBS are offering £50 cash up-front this year.

Providers have also cut back on the interest paid on balances. This year only two providers are offering any interest on balances with student accounts. The best of these is TSB’s Student account, which is offering 5% on balances up to £500. The other account is the Halifax Student account, although this only pays 0.1%.

Student accounts have typically offered interest free overdrafts to students, which provided a useful safety net for students living away from home for the first time.

The amount offered is sometimes staggered so that the amount increases over the term of the account. Barclays, for example, has recently reduced how much interest free overdraft is available to just £1,500.

Some banks and building societies are offering other incentives to attract student customers. Santander is offering a free four year 16-25 Railcard, which gives a third off rail travel in UK.

Barclays is offering a voucher for a free 12-month subscription to Perlego, an online e-book subscription service.

However, students are urged to consider all features of an account against the incentives.

Katie Brain, banking expert at Defaqto, said: “This year’s students have had to work hard studying through lockdown to get the exam results to get into university. Getting a bank account is unlikely to be their top priority but getting a good product with the right features and benefits for them will make their time at university much easier.

“Banks know that graduates are likely to be good customers, potentially earning higher salaries after university and this is why the student bank account incentives are so generous.

“Managing money when you leave home for the first time can be daunting and it’s important to get a bank account that suits the student.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week