Managing your cash as a student doesn’t have to be a nightmare. Here five top tactics to make your bank account pay its way.

Pick the right benefits

Banks are keen to grab customers while they’re at university – which is why student accounts come with tasty extras to get your attention. Whichever perks you go for is up to you, but it’s worth weighing up which are most valuable in the long run:

  • Freebies, including rail/coach cards, are handy if they’re something you’d buy (and use a lot) anyway – but only if you’re always in credit!
  • In-credit interest: money the bank pays you to keep your cash with them. If you always have a positive balance, picking the highest interest rate is going to earn more for your money.
  • Fee-free, 0% overdraft: arguably the most valuable freebie. Agreeing an overdraft in advance (and sticking to the terms) can help you avoid fees, penalties and interest on overspending. We’ll explain why below.

Go digital

Internet banking makes managing your money fuss-free, so it’s worth checking what your bank offers (or switching to an account that does what you need).

Text or push alerts: tell you when you’re low on funds, i.e., before you spend more than you have in your account or overdraft.

Contactless options: contactless payments by card, smartphone or smartwatch speed up shopping transactions (but also make it easier to spend money!).

Easy savings: from saving the change on everyday purchases to letting you move a few pounds into a savings account with just one tap, it’s worth checking how easily your bank lets you grow your savings.

Make the most of the overdraft

Overdrafts are a way to borrow from the bank if you really need to (for instance, covering unexpected bills or emergencies). If there’s any chance you might ever spend more than you have in your account, a fee- and interest-free student overdraft means borrowing a bit extra won’t cost you anything.

Overspending without agreeing an overdraft can mean paying the bank interest on the extra cash you spend, being charged every day you’re overdrawn, and being stung with a penalty fees for refused payments. Agreeing a 0% overdraft will work out much cheaper, so it’s often safer to arrange one, just in case.

If you’re certain you’ll never need to overspend, and you’re totally on-top of your finances, it can still be worth getting the largest overdraft you’re eligible for and putting the cash into a high-interest savings account instead. That way, you can use your free overdraft to make money.

Double-up on accounts

While you may not be allowed to open a second student bank account, it’s perfectly fine to have multiple current accounts. In fact, having a couple of accounts on top of your student deal makes a lot of sense.

Start by putting cash for bills and important costs in one account – just ensure you keep enough money in there to cover your direct debits each month. You can then use a second account for your daily spending: that means you never have to worry about accidentally spending your rent money. If you prefer, transfer your spending money to a prepaid Mastercard, and you won’t have to worry about going overdrawn (because you can’t!).

Load-up on apps

There’s a growing number of online-only banks and apps that can help you improve your money skills. And, if your current bank doesn’t do everything you want it to, third-party providers can help plug the gaps – just make sure you check the small print and security before signing up.

Money dashboards: these connect to all your accounts (at any bank) to give you an overview of what cash you have, where it goes, and any patterns in your spending and saving.

Auto savings apps: you give them read-only permission to your bank accounts and they identify how much you can afford to save, without missing the cash. They then transfer that to a savings account for you.

Budget trackers: not as automated as the dashboards, but a solid way to track your money. If you’re serious about staying on top of your cash, this is the simplest way to get started.

There are plenty of tools and tricks to make money management easier than ever. Just pick the bits that work for you, stick to the terms, and keep switching to better deals when you find them.

Guest blog written by Ruth Bushi, an editor at Save the Student.