Student Bank Accounts - Picking the Best Deal While You Study
Get the Student Bank Account that Offers the Most
Updated January 2018
TLDR Review Summary of Student Bank Accounts
- Not all Student Bank Accounts are the same - and all have fees for overdrafts. We found the BNZ charges $60/year for a $2,000 overdraft while ASB charges ~$30 for the same overdraft amount.
- Some banks charge for a debit card, some don't. The best banks didn't.
- The Co-operative bank pays 4% per annum on deposits; most other pays pay nothing.
- Some accounts don't charge for campus ATM use, so you don't need to pick an account based on whether the bank has a branch on campus.
- Get one as soon as you can, you'll get free fees and freebies such as credit cards as well as other perks.
Student bank accounts are exactly that; bank accounts for those enrolled in university or polytechnic, or higher education such as an apprenticeship. The features of these accounts can save you hundreds of dollars a year, as they include free account fees, free transactions, higher deposit interest rates for savings, free credit cards, interest-free overdrafts and special offers. However, student bank accounts also need to be treated with caution and used sensibly to avoid financial stress later on in your studies - nothing is ever free, and the banks cannot be relied on if you find yourself short on cash.
As reader Andrew explains: “I was in my first year and had a $1,000 overdraft. I didn’t think I’d need it but o-week was a blowout and I quickly hit the limit. The timing wasn’t great and I became financially crunched in the second week of studies, meaning I had to urgently borrow from my sister. I thought my student bank account would let me increase the overdraft but it didn’t, I learned that the hard way”.
In this guide we review the best student bank account for your needs and offer helpful step by step guidance to protect yourself from blowouts and financial hardship. Being a student is stressful enough without facing unavoidable money issues.
As reader Andrew explains: “I was in my first year and had a $1,000 overdraft. I didn’t think I’d need it but o-week was a blowout and I quickly hit the limit. The timing wasn’t great and I became financially crunched in the second week of studies, meaning I had to urgently borrow from my sister. I thought my student bank account would let me increase the overdraft but it didn’t, I learned that the hard way”.
In this guide we review the best student bank account for your needs and offer helpful step by step guidance to protect yourself from blowouts and financial hardship. Being a student is stressful enough without facing unavoidable money issues.
Six Essential Tips for Student Bank Accounts
- Get the biggest 0% overdraft available so you have it when you need it, but make sure the account has low fees - many don't!
- Ask for increased overdrafts at the start of every year so you have it if you need it.
- Not all student bank accounts offer the same - overdraft fees vary, as does the allowance.
- Never go above your approved overdraft limit
- Plan your finances with a realistic budget – this will help you immensely throughout your studies
- Save as much as you can in on-call deposits when you earn or receive money
Student Life and the Reality of Overdrafts
Almost every student will need an overdraft, which means the bank will lend you more money than you have to a set limit. The standard overdraft is $1,000 for first year students but you can go higher in subsequent years of study. Make sure you have the overdraft confirmed by your bank so you have it available when you need it.
Warning: If you’re not able to budget or have bad spending habits, ask your bank for a smaller overdraft – the less you borrow, the less chance you have of being dragged into debt.
Almost every student will need an overdraft, which means the bank will lend you more money than you have to a set limit. The standard overdraft is $1,000 for first year students but you can go higher in subsequent years of study. Make sure you have the overdraft confirmed by your bank so you have it available when you need it.
Warning: If you’re not able to budget or have bad spending habits, ask your bank for a smaller overdraft – the less you borrow, the less chance you have of being dragged into debt.
The Best Student Bank Accounts Currently Available
We've listed all of the student bank accounts available for year 1 students and the 0% overdraft limits amount they offer, ranked from most attractive to least attractive.
Our Pick - ASB Bank Tertiary Student Package
Free Debit Card, Free Credit Card, Free McDonald's Fries and up to $2,000 Overdraft at a Low Fee
Benefits:
Free account fees
Free debit card
Free Visa Light credit card, with no annual fees, 6 month interest-free on purchases over $1,000 and a low interest rate of 13.50%
Unlimited transactions
Free fries when you pay for any McDonald's® meal using a ASB Visa Debit card.
Overdraft:
Our view: The ASB offers fantastic benefits with its free debit card and free fee Visa Light credit card as well as a free chips at McDonalds® promotion, and a reasonably priced overdraft facility fee. You'll pay around $30/year for a $2,000 overdraft facility if you use it or leave it untouched. The ASB also has a number of branches, some on-campus.
Free account fees
Free debit card
Free Visa Light credit card, with no annual fees, 6 month interest-free on purchases over $1,000 and a low interest rate of 13.50%
Unlimited transactions
Free fries when you pay for any McDonald's® meal using a ASB Visa Debit card.
Overdraft:
- Available to all students 18 years or over who are permanent NZ residents.
- Up to $1,000 interest free overdraft for first year students
- $2,000 for second and subsequent year students
- Overdraft facility fee -charged at "the greater of 0.12% of the overdraft limit (i.e. $1,000) and 0.12% of the highest daily overdrawn balance" with a minimum charge of $2/month. For example, a $2,000 overdraft facility will be charged $2.40/month.
Our view: The ASB offers fantastic benefits with its free debit card and free fee Visa Light credit card as well as a free chips at McDonalds® promotion, and a reasonably priced overdraft facility fee. You'll pay around $30/year for a $2,000 overdraft facility if you use it or leave it untouched. The ASB also has a number of branches, some on-campus.
Runner Up - Co-operative Bank
Free Use of ATMs Anywhere, 4% p.a. on Deposits, Low Fees, $1,000 Overdraft Limit
Benefits:
Free account fees
Flexible ATM usage – cardholders can use any bank ATM free of charge
Free debit card
Attractive 4% interest rate on savings on call (up to $4,000, paid monthly)
Unlimited transactions
Overdraft:
Our view: The Co-operative bank trumps every bank by offering free ATM use anywhere, but has a limited $1,000 overdraft that costs $42/year to have. There is an excellent deposit rate of 4%. The drawback of the service is that there are a limited number of branches (32 nationwide) which may be inconvenient.
Free account fees
Flexible ATM usage – cardholders can use any bank ATM free of charge
Free debit card
Attractive 4% interest rate on savings on call (up to $4,000, paid monthly)
Unlimited transactions
Overdraft:
- Available to all students 18 years or over who are permanent NZ residents.
- Up to $1,000 interest free overdraft
- $3.50/month facility fee for an overdraft
Our view: The Co-operative bank trumps every bank by offering free ATM use anywhere, but has a limited $1,000 overdraft that costs $42/year to have. There is an excellent deposit rate of 4%. The drawback of the service is that there are a limited number of branches (32 nationwide) which may be inconvenient.
Special Mention - Westpac School Leave Pac
Free Air New Zealand Airpoints Earning Debit Card, PayTag and up to $2,000 Overdraft
Benefits:
Free account fees
Free debit card, including the Airpoints™ Debit Mastercard® (one Airpoints Dollar for every NZ$250 you spend)
Unlimited transactions
Westpac PayTag® 12 months fee waiver on a $1,000 credit limit Westpac credit card (if you apply for and receive one)
Overdraft:
Our view: Westpac offers up the useful PayTag® and Airpoints-earning debit card as perks, but the offering does not stand out from other banks and overdraft fees are still $36/year.
Free account fees
Free debit card, including the Airpoints™ Debit Mastercard® (one Airpoints Dollar for every NZ$250 you spend)
Unlimited transactions
Westpac PayTag® 12 months fee waiver on a $1,000 credit limit Westpac credit card (if you apply for and receive one)
Overdraft:
- Available to all students 18 years or over who are permanent NZ residents.
- Up to $1,000 interest-free overdraft for first year students
- $2,000 for second and subsequent year students
- $3/month facility fee for an overdraft
Our view: Westpac offers up the useful PayTag® and Airpoints-earning debit card as perks, but the offering does not stand out from other banks and overdraft fees are still $36/year.
Strong Offering - ANZ Bank Jumpstart Account
Benefits:
Free account fees
Free debit card
Unlimited transactions
12 months credit card fee waiver (credit card annual fees start at $35/year)
Overdraft:
Our view: The ANZ delivers with a free debit card and competitive $3/month overdraft facility fee, but still lacks the perks offered by Co-Operative Bank, ASB and Westpac.
Free account fees
Free debit card
Unlimited transactions
12 months credit card fee waiver (credit card annual fees start at $35/year)
Overdraft:
- Available to all students 18 years or over who are permanent NZ residents.
- Up to $1,000 interest free overdraft for first year students
- $2,000 for second and subsequent year students
- $3/month facility fee for an overdraft
Our view: The ANZ delivers with a free debit card and competitive $3/month overdraft facility fee, but still lacks the perks offered by Co-Operative Bank, ASB and Westpac.
Student Bank Accounts: Best of the Rest
The Student Bank Accounts that Could Do Better
Bank of New Zealand YouMoney Account
Benefits:
Overdraft:
Our view: With no perks other than free fees, the BNZ is not competitive and loads students up with its $60/year overdraft facility fees and an annual debit card charge of $10.
- Free account fees
- Free account alerts
- Unlimited transactions
- 12 months free debit card, then $10/year
Overdraft:
- Available to all students 18 years or over who are permanent NZ residents.
- Up to $1,000 interest-free overdraft for first year students
- $1,500 for second year students
- $2,000 for third and subsequent year students
- $5/month facility fee for an overdraft
Our view: With no perks other than free fees, the BNZ is not competitive and loads students up with its $60/year overdraft facility fees and an annual debit card charge of $10.
Kiwibank Tertiary Account
Benefits:
Free account fees
Free debit card, with the $10 annual fee waived in the first year
Flexibility in ATMS – use any bank’s ATM on campus for free
Unlimited transactions
12 months credit card fee waiver (credit card annual fees start at $50/year thereafter, and the credit limit is $500)
Overdraft:
Our view: Kiwibank delivers a low overdraft fee ($2/month) and free on-campus ATM usage, but charges for a debit card ($10/year) and doesn't offer deposit interest.
Free account fees
Free debit card, with the $10 annual fee waived in the first year
Flexibility in ATMS – use any bank’s ATM on campus for free
Unlimited transactions
12 months credit card fee waiver (credit card annual fees start at $50/year thereafter, and the credit limit is $500)
Overdraft:
- Available to all students 18 years or over who are permanent NZ residents.
- Up to $1,000 interest free overdraft for first year students
- $2,000 for second and subsequent year students
- $2/month facility fee for an overdraft
Our view: Kiwibank delivers a low overdraft fee ($2/month) and free on-campus ATM usage, but charges for a debit card ($10/year) and doesn't offer deposit interest.
Student Bank Account FAQs
Q: When can I open a student bank account?
A: To be eligible you will need to be studying with an approved NZQA education provider. The bank you select will ask you to confirm and prove you are enrolled in studies and are over 17 years of age.
Q: What ID do I need to open a student bank account?
A: You will need a valid ID, such as a driver’s licence or passport, and you will also need your IRD number. You may also need a proof of address.
Q: What is an overdraft, and why is it “interest-free”?
A: An overdraft lets you to spend more money than you have in your bank account, up to certain limit. $1,000 is the standard limit across all student bank accounts for students in their first year, with the option of applying to increase it in subsequent years to $2,000. The overdraft is interest-free for the duration of your study for many reasons, but primarily because the bank is trying to create brand loyalty with you and hopes you will stay with them for a long period.
Q: I'm already a student and don’t have a student bank account – can I get one?
A: Yes. Student bank accounts are available for any student at any time of their study. If you are in your second or third year, you could be eligible for additional overdraft limits.
Q: I don’t need a student bank account. Should I get one anyway?
A: Yes. You never know when you'll need interest-free money. You can also build up your credit rating in the 3-4 years of study you undertake. You also have the option of withdrawing the money from the student account and investing the interest-free sum into a high-interest account (at any bank, even your existing one). You will earn interest income on the money the bank lends you for free.
A: To be eligible you will need to be studying with an approved NZQA education provider. The bank you select will ask you to confirm and prove you are enrolled in studies and are over 17 years of age.
Q: What ID do I need to open a student bank account?
A: You will need a valid ID, such as a driver’s licence or passport, and you will also need your IRD number. You may also need a proof of address.
Q: What is an overdraft, and why is it “interest-free”?
A: An overdraft lets you to spend more money than you have in your bank account, up to certain limit. $1,000 is the standard limit across all student bank accounts for students in their first year, with the option of applying to increase it in subsequent years to $2,000. The overdraft is interest-free for the duration of your study for many reasons, but primarily because the bank is trying to create brand loyalty with you and hopes you will stay with them for a long period.
Q: I'm already a student and don’t have a student bank account – can I get one?
A: Yes. Student bank accounts are available for any student at any time of their study. If you are in your second or third year, you could be eligible for additional overdraft limits.
Q: I don’t need a student bank account. Should I get one anyway?
A: Yes. You never know when you'll need interest-free money. You can also build up your credit rating in the 3-4 years of study you undertake. You also have the option of withdrawing the money from the student account and investing the interest-free sum into a high-interest account (at any bank, even your existing one). You will earn interest income on the money the bank lends you for free.
Our Best Tips Rules for having a Student Bank Account
1. Consider the closest branch or ATM when deciding on which bank
Every cash withdrawal from an ATM not operated by your bank costs $1 in transaction fees, so branch and ATM location is relevant, unless your account allows flexible ATM usage.
2. After you finish studying, switch to a “Graduate” account
Graduate accounts are provided by a range of banks and offer the key benefits of a student bank account, specifically an interest-free overdraft. These accounts last for two years and provide more flexibility in paying back any overdraft you may have while enjoying no fees, low interest and zero-fee credit cards. If you have already graduated, most banks allow you to take up a graduate account within two years of finishing an apprenticeship or graduating from tertiary studies.
Every cash withdrawal from an ATM not operated by your bank costs $1 in transaction fees, so branch and ATM location is relevant, unless your account allows flexible ATM usage.
2. After you finish studying, switch to a “Graduate” account
Graduate accounts are provided by a range of banks and offer the key benefits of a student bank account, specifically an interest-free overdraft. These accounts last for two years and provide more flexibility in paying back any overdraft you may have while enjoying no fees, low interest and zero-fee credit cards. If you have already graduated, most banks allow you to take up a graduate account within two years of finishing an apprenticeship or graduating from tertiary studies.
General Information and What You Need to Know before opening a student bank account
- You need to be 17 years of age or older to open any student bank account.
- You can apply at any time while you are studying
- You can decide on your overdraft – the $1,000 maximum in year one is the limit but you can choose a lower amount.
- You will likely pay a monthly overdraft facility fee, which ranges from $2/month (Kiwibank) to $5/month (BNZ) - ask your bank to explain this in detail to you if you have any questions.
- After you graduate, you can transfer to your bank’s “Graduate” account. If your bank doesn't offer one, others do.
Beyond a Student Bank Account - Preparing a budget, and getting it right.
Funding is key to a happier student experience. And if you plan well with a budget, financial stress will be far less likely. The list below covers all of your possible income available. Check our Scholarships NZ Guide 2018 to what further financial assistance is available wherever you are located in New Zealand.
When it comes to preparing your student budget, include ALL of your "income", such as:
Important: Remember that while interest-free overdrafts are useful and help you out with cashflow, they are not income and a loan is a debt that must be repaid.
Funding is key to a happier student experience. And if you plan well with a budget, financial stress will be far less likely. The list below covers all of your possible income available. Check our Scholarships NZ Guide 2018 to what further financial assistance is available wherever you are located in New Zealand.
When it comes to preparing your student budget, include ALL of your "income", such as:
- Student Loan for course fees
- Student Loan for course-related costs
- Student Allowance (if applicable)
- Student Living Expenses loan
- Employment income
- Scholarship income
- Money from family
Important: Remember that while interest-free overdrafts are useful and help you out with cashflow, they are not income and a loan is a debt that must be repaid.
