Guide to The Best Banks for International Students in the UK
Setting up a bank account in a foreign country as an international student may leave you with a world of options, some being better than others, and a lot of confusion. By the time you get to the end of this article, you will have a good idea of what you need to consider, what your options are, and how to open a bank account as an international student.
However, it is worth bearing in mind that the ideal bank account differs for every student; the perfect match is dependent on personal circumstances, including how long you will be studying in the UK, whether you need an overdraft, and how regularly you send and receive money. This guide to the best banks for international students will cover the best options for a range of circumstances.
For any students wondering if they can manage their finances from their home-country accounts, it isn’t recommended – for a variety of reasons. Forgoing a UK bank account as an international student is highly impractical, and the costs can soon rack up. There are currency conversion fees and exchange rate fluctuations to consider. Furthermore, paying for accommodation, setting up direct debits, and being paid for part-time work will become far easier with a UK account.
The Main Considerations When Choosing a Bank in the UK
Before searching for a new bank as an international student, it is always worth checking if your current bank also operates in the UK; many banks, such as HSBC, operate as global corporations. Several global banks allow existing customers to open an international student account before they reach the UK.
Check the rates on international transfer fees; as an international student, it is likely that, at some point, you will receive or send money home. Banks will charge a commission fee between 4% and 6% for converting your money, in addition to the cost of transferring your money.
Are the long-term benefits worth the freebies? Some banks will offer incentives to international students, such as free cash or access to a subscription service. However, these small perks will soon be worthless if the transfer fees are extortionately high.
Do you need access to an overdraft? Some banks offer small overdrafts to students, usually up to a maximum of £100. Again, don’t prioritise this facility over low rates, and pay close attention to the interest rates attached to overdrafts.
Is the nearest branch local? Even though most banking is done online and over the phone, it is still worth choosing a bank with a branch nearby to your campus. Even if you don’t anticipate going to the bank all too often, you will still need to open your bank account in a branch in most cases.
The process of opening a bank account differs with every bank; some allow international students to open their accounts before they arrive in the UK. However, with most, you will likely need to open your bank account in the local branch, where you can present the necessary documents, including a passport, visa, a bank statement issued in the last three months from your home bank, proof of address and Student ID/acceptance letter.
The 6 Best Banks for International Students
NatWest Select Account
While NatWest no longer offers bank accounts exclusively for international students arriving in the UK, NatWest Select Account can be opened by international students.
One of the main reasons why the NatWest Select Account is so popular amongst International Students is the availability of an overdraft. However, for students dipping into their overdrafts, interest fees apply, and overdrafts are granted on a discretionary basis.
There are no fees to open the bank account, nor are there any monthly maintenance fees. Furthermore, the international transfer fees are amongst the lowest out of all the UK banks, and you will never pay fees when sending money abroad using the standard service.
Eligibility Criteria: 18+, UK resident
RBS Select Account
There are plenty of similarities between the NatWest Select Account and the RBS (Royal Bank of Scotland) Select Account, as the two banks are part of the same financial group. There are very few differences between the fees, terms, eligibility criteria and how you go about setting up an account as an international student.
Many students decide between the two Select accounts based on how nearby the local branches are. Opting for a bank with a closer branch will ensure that when you need to deposit cash or speak to a member of the bank in person, you won’t need to go far out of your way to do so.
Overdrafts are available, depending on eligibility status, and interest fees apply. Receiving Euros will come at no additional cost; for all other currencies, it costs £1 to receive less than £100 and £7 on incoming transactions over £100.
Eligibility: 18+, UK resident.
Barclays Student Additions Account
With Barclays bank, there isn’t a separate option for international students. Instead, international students can apply for the standard student bank account – which comes with some pros and cons.
One of the biggest benefits of international students being eligible for standard student bank accounts is access to a far bigger overdraft. While the NatWest and RBS Select Accounts offer a modest overdraft, for third-year university students, the overdraft can rise to £1,500. Furthermore, there are no interest fees for dipping into your overdraft.
Even though this bank account isn’t exclusively for international students, there are no fees incurred when sending money abroad, regardless of currency, and it is also free to receive Euros.
The only conversion fees apply when receiving over £100 from abroad, in any currency other than Euros. Even then, transactions over £100 only incur a fee of £6. The only major downside is the requirement to have a UK mobile number, which prevents many international students from opening an account before they arrive.
Eligibility: 18+, proof of student status, UK residential address, valid photo ID, UK mobile number.
HSBC International Students Bank Account
Unlike most UK banks, HSBC is one of the only UK banks that has kept its Student Bank Account options. Naturally, this makes them a very popular choice amongst international students looking for a new bank while abroad. However, the specificity of the bank account does not mean that it is the best option for all students.
For starters, the HSBC International Students Bank Account does not come with access to any credit facilities available via other banks, such as the NatWest Select Account. International students are not able to apply for an overdraft with HSBC, nor can they apply for loans.
As HSBC is a global bank, many international students already have an HSBC account before they arrive in the UK. In this instance, it is possible to set up a student bank account before arriving in the UK. For brand-new customers, students will need to wait until they can visit a local branch before they set up an account.
In terms of international transfer fees, sending money to all HSBC accounts is free, as is sending Euros to EEA countries. To send cash to non-HSBC accounts registered in non-EEA countries, the fee is £5. The same fee applies for receiving money in pounds and all other currencies.
Eligibility: 18+, proof of UK address.
Lloyds Classic Account
The Lloyds Classic Account is available to the majority of international students. As you can probably guess from the name of the account, it isn’t exclusively for international students, but few students studying abroad have issues applying for it. While some banks require you to have lived in the UK for at least three years, this bank account accepts international students as long as they are permanent residents.
However, to be eligible for the overdraft, you will need to have lived in the UK for at least three years; even then, there is no guarantee that it will be granted. Furthermore, international transaction fees are slightly higher in some respects. While it costs nothing to send or receive money in Euros, it costs a flat rate fee of £9.50 to send money abroad in every other currency. When receiving money from all currencies other than Euros, it costs £2 for transactions under £2 and £7 for transactions over £100.
Other benefits to this bank account are the lack of fees for opening and maintaining an account, and the simplicity of the account. However, for any student regularly receiving money from abroad in non-EEA countries, it may be worth opting for a bank with slightly lower fees.
Eligibility: 18+, have proof of a UK address.
TSB Spend and Save Account
For any student interested in saving while they study, the TSB Spend and Save Account is the clear frontrunner in the bunch – especially as the economy is only getting tougher in the UK in 2023, leaving many students worried about their finances.
Once you are in the UK and have proof of address, you will be able to apply for the saver account, which is more than student-friendly. One of the biggest benefits of this account is the £5 cashback deal, which pays £5 in cashback each month for the first six months after opening the account. To qualify for the cashback, 30+ debit card payments each month are all that are required.
To help keep your bank balance healthy, there are some great other features, such as the Savings Pot feature, which is ideal for setting money aside, and the Save the Pennies feature, which automatically saves money after every debit card transaction. For example, if you buy a latte worth £3.70, 30p will automatically be moved into your savings account, as each transaction is rounded up to the nearest pound.
The auto balance feature is also great at keeping finances in check. With this feature, you can set a minimum balance you don’t want your account to dip under. When your balance is at risk of doing so, any money saved will automatically be moved to your main balance to prevent dipping into your overdraft. However, as with most accounts available to international students, the overdraft is not guaranteed.
Fees-wise, any transactions involving Euros are free. However, the rate for sending money in all other currencies is far higher. To send under £5,000, it costs £10. For transactions over £5,000, the fee is £17.50. To receive money in all other currencies, transactions under £100 cost £2 in conversion fees, and transactions over £100 cost £7 to convert.
Eligibility: 18+, UK Resident.