What is a student arranged overdraft?
As a student, there are a few ways you can get money. You may use a student maintenance loan, ask your parents or work a part-time job.
But if your bills are a little higher one month or you make an unexpected purchase, maybe because your laptop breaks, you may need a little more money than usual. This is where an overdraft can come in.
An overdraft means you have a safety net in case things don’t stretch far enough when you need to spend that little bit extra. There are 2 types of overdraft: unarranged and arranged.
What is an unarranged and arranged overdraft?
An unarranged overdraft is where you spend more money than the amount in your bank account without agreeing this with your building society or bank in advance or when you go over your arranged overdraft limit.
An arranged overdraft is an agreed amount of money, for example £1,000, that you can spend when there is no money left in your bank account.
Overdrafts are a form of short-term borrowing, like student loans. When you use an overdraft, you will have to pay it back.
Does our student bank account come with an overdraft?
You can apply for an arranged overdraft with both our FlexStudent and FlexGraduate current accounts. We’ll decide whether to give you an arranged overdraft and whether to change its limit based on our view of your financial circumstances.
At Nationwide, to help keep you safe from too much debt and because it can harm your credit score, we do not offer unarranged overdrafts. Instead, because we’ve agreed the limit of your arranged overdraft, we’ll try to stop any payments from coming out of your account over this agreed amount if you don’t have enough money.
If you go over your arranged overdraft limit, we won’t charge you. But you will not be able to withdraw cash or transfer money until your account balance is back in credit or within its agreed limit.
How does our student arranged overdraft work?
As we offer an arranged overdraft, you’ll have to apply for it and set a limit. In your first year of study, you can ask to borrow up to £1,000. We understand it’s difficult to know how much money you’ll need before you’ve started your life as a student. So, you can apply for and change the limit of your arranged overdraft at any time.
During your second year, you can ask to borrow up to £2,000. Again, you can ask to change the limit at any time. If your course is 3 years or longer, your limit for these years increases to £3,000.
We appreciate that paying back an overdraft can take time. Unless you make other arrangements, we’ll move your FlexStudent to a FlexGraduate when you finish your studies. With FlexGraduate, we’ll gradually reduce your arranged overdraft limit each year for up to 3 years for a 3-year course or up to 2 years for a 2-year course. To help you pay your overdraft back over time as you become more settled, we do not reduce the limit all at once.
There are eligibility criteria that you must meet to apply for FlexStudent. So, make sure you read our FlexStudent eligibility criteria before you apply.
What tools do we have to help you manage your money?
Keep track of your money
We’ll send you text alerts to help you manage your arranged overdraft. And if you opt in, we can send you text alerts about your spending. For example, we can let you know if you have a high balance, perhaps because your maintenance loan has just come in. Or we can warn you if you’re approaching a pre-set low amount. We don’t charge for our text alert service. But your service provider may charge you if you receive text alerts outside of the UK.
Bank securely with our app or online
You can manage most things from our Banking app or Internet Bank. Whether you’re sending money to a friend for rent, setting up a standing order for your bills or just keeping track of your finances.
Pay how you want to
You can use our FlexStudent with Apple Pay, Google Pay, Samsung Pay or Paym. And you can make contactless payments up to £100 with your FlexStudent Visa debit card.
Why open a student bank account with us?
We've designed our arranged overdraft to support you
Our arranged overdraft for students is completely free. There are no fees, no charges and no interest to pay.
Because you know what you can afford, we don’t automatically increase your arranged overdraft limit. You’ll need to ask us to change it instead.
Save for your future
Because you’ll become a Nationwide member by opening a FlexStudent, you get access to exclusive savings accounts, like our Flex Regular Saver.
It’s quick and easy to open. We’ll ask you during your online FlexStudent application if you would like to open a savings account at the same time.
Help support social causes
We were founded for a social purpose way back in 1884: to help each other buy homes and save for our futures. We believe now, just as we did back then, that by coming together for mutual good, we can help build a stronger, kinder society, nationwide.
What does that mean? It means that as a building society, we try to do things for the mutual good of all. We're not owned by shareholders in the same way as banks are. We're owned by our members. This includes anyone who has a current account, mortgage or savings account with us. So, we work for you and try to give back to important causes.
Our members get a say on how we're run, the services we provide, and the great social and environmental causes we support.
Learn more about our FlexStudent current account
Ready to read more about our student bank account?