How to open a bank account as a UK overseas student

If you plan to study in the UK, it's worth getting your British finances in order as soon as you can. NimbleFins takes a look at how international students can open a UK bank account.

If you're an international student studying in the UK you'll need a way to manage your money while on British shores.

Setting up a bank account in a foreign country may seem daunting at first, especially if your home country has a personal finance culture that differs from the UK. However, the good news is that it's pretty straightforward as long you follow the right steps.

In this guide, we take a look at how overseas students can set up a bank account in the UK.

How do bank accounts in the UK work?

There are a huge number of retail banks in the UK and, as a result, the market is fiercely competitive. This is good news for consumers, as there are an array of generous accounts available.

Some UK bank accounts reward customers by offering cashback on utility bills. Other bank accounts pay interest on cash balances, while some will offer a collection of perks to account holders, such as free travel insurance, or mobile phone cover. Because the market is ultra-competitive, some banks will even offer a cash bonus to those switching from another account.

Unlike in other some countries, the majority of bank accounts in the UK are fee-free.

Importantly, any cash held in a UK bank account is covered under the £85,000 Financial Services Compensation Scheme. This means that anything kept in a UK bank account, up to this figure, is protected, even in the unlikely event a bank enters administration. This is similar to other compensation schemes found in Europe such as the French 'Fonds de Garantie des Dépôts' and the 'Dutch Deposit Guarantee scheme' that applies in the Netherlands.

Do overseas students really need a bank account?

If you're a student in the UK, particularly if you're on a tier-4 visa and plan to work, it's a good idea to open a UK bank account.

For example, if do you find employment, you could have difficulty receiving a salary if you don't have a UK bank account. Likewise, it's typical for accommodation providers to request payments from a UK account.

If you don't get a UK bank account, you'll instead have to rely on a debit card from your home country. Not only will a card from your home country likely charge you a fee every time you pay in pounds, but you'll also find it more difficult to budget. That's because you'll be at the mercy of currency fluctuations.

How easy is it for overseas students to open a bank account in the UK?

Unfortunately, not all bank accounts are open to international students. This means the choice of accounts available to those temporarily studying in the UK aren't as wide-ranging as the options available to UK citizens.

Despite this, there are still accounts open to international students, though to successfully apply for one of these accounts you'll at least be required to have a fixed UK address.

If you apply for an account open to international students, it may still take a while for the bank to officially open your account. You'll also have to wait to be issued with a debit card, which can take a few days. As a result, many international students do rely on a debit card from their home country before officially setting up a British account. If you choose to do this try to keep your transactions to a minimum if you get charged every time you spend on your card in a foreign currency.

Alternatively, you may also wish to sign up for a temporary prepaid card in your home country until you get round to opening a UK bank account. This will allow you to load up the card in pounds from your home currency. Prepaid cards available to you will depend on the country you are traveling from. However, Revolut is a popular option, and available in a number of EU countries. Revolut allows cardholders to load up their card in their home currency, before transferring it to pounds at a fixed rate.

What are the best bank accounts for international students in the UK?

If you're an international student in the UK, you won't be eligible for every bank account out there. That's because some banks restrict applications to those who permanently reside in the UK. That being said, there are still a number of accounts that are either targeted towards international students, or simply have loose eligibility requirements.

Both Starling and Monzo are two popular app-only bank accounts. Both pay a small amount of interest on account balances (with Monzo you must open a linked 'savings pot'). Both accounts allow you to pay in pounds overseas at no cost. Starling and Monzo are very popular in the UK, not only because of these decent account 'perks' but also because their respective mobile apps score highly on usability.

Most importantly, however, you can apply for a Starling or Monzo account, even if you aren't a UK resident, or a UK tax resident. You just need to be over 16 and live at a UK address.

If neither of these accounts are for you then the HSBC International Student is also open to those studying in the UK. Alternatively, the Lloyds Basic account, Santander Basic, and TSB Spend & Save accounts all accept international students too.

There honestly isn't much to choose between all of the above, so click the links to study the features and benefits.

Transferring money from a UK bank account overseas

If you wish to send pounds back to your home currency, your UK bank account will usually offer such a service. All you need is an International Bank Account Number (IBAN). However, if you transfer cash this way you'll probably be faced with a range fees, not to mention a rip-off exchange rate.

Instead, it's probably a better idea to look at a specialist money transfer company or broker. If you go down this route just ensure the company you use is reputable and has transparent fees. This step is particularly important if you plan to transfer a lot of pounds, as the saving from dodging fees will be magnified.

Can international students get a UK credit card?

Banks often require credit card customers to be UK citizens. As a result, if you've recently arrived in the UK it's likely you'll find it difficult to get your hands on a UK credit card.

That said, if you have ambitions to stay in the UK after studying, it's worth paying attention to your credit score. This is because positively building your credit score can help you get accepted for UK credit products in the future. This is actually easy enough to do.

Simple steps such as getting on the electoral roll, paying bills, establishing a fixed address, and gaining employment can all help! For more credit boosting tips, take a look at our article that explains how to boost your credit score.

Karl Talbot

Karl is a personal finance expert who specialises in writing about savings accounts, credit cards and cheap personal loans. Karl has worked for a number of personal finance publications including The Motley Fool and MoneySavingExpert.