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What are your banking needs as an overseas student?

If you or your child are considering a study abroad or relocation, you'll need to think about how you'll manage your money once you arrive. Choosing the right student bank account, understanding overdraft facilities and using credit cards wisely is all part of the process. You'll find that financial products are not the same in every country and every student has different needs.

As a student, you may need to send and receive money transfers both internationally and locally. A scholarship, for example, will be deposited straight into your local account, and your tuition fees can be directly debited out of your account. Parents could also transfer funds into your account virtually, without having to head down to a local bank branch to wire money over. 

You can also use your local bank account to:

  • receive foreign currency support
  • pay bills securely, with no extra charges
  • build local credit history
  • view your account balances and transactions
  • directly deposit your salary (very helpful if you're working part-time to raise money to travel)
  • manage your credit card payments

If you've already arrived at your destination, this checklist for settling in might make your first week or two as an international student, easier.

You might be expected to have a local account

You may find it more difficult to get by in some countries without a local bank account. In the UK, you're usually required to have a bank account to apply for a mobile phone contract and to pay your utility bills. Employers will also expect you to have an account for them to direct deposit your salary into.

If you're moving to the US or Canada, having a bank account will make it much easier to manage your finances. You'll probably do most of your day-to-day banking from a chequing account, including paying your bills. Any scholarships or financial aid you'll receive will most likely come as a cheque or be directly deposited into your account.

Choosing the account that's right for you

Some bank accounts that are geared toward students and graduates come with incentives: cash rewards, welcome deposits, railcards, and no maintenance fees or minimum balance.

What about a bank account that helps you with your student visa? The HSBC International Student Program in Canada provides you with a chequing account and a guaranteed investment certificate (GIC) to help you pay for your living expenses while you're studying in Canada. This then fast-tracks the visa requirements of Immigration, Refugees and Citizenship Canada's Student Direct Stream (SDS).

Besides the incentives, you'll want to consider ATM fees both at home and abroad, how good the online and mobile banking tools are (can you do all your banking on the go?), and whether you think you might need overdraft protection and a credit card.

Will you need overdraft protection?

Overdraft allows you to spend more than what's in your account. It can be a useful way of borrowing money if you pre-arrange this with your bank.

While you can borrow what you need, you'll likely be charged a higher rate of interest than other borrowing methods. Going over your arranged overdraft limit can affect your ability to get credit in the future, too. Some student and graduate account overdrafts are interest-free. If you're unsure, it's worth checking if you'll be charged interest.

Instead of relying on overdraft, maybe it's better to build a budget and track your spending habits.

Will you need a credit card?

Using a credit card is a good short-term borrowing option if you need to buy something now but don't have enough cash on hand for it. If you pay your card in full, you won't be charged any interest.

The pros:

Build up your credit score by borrowing wisely with your card and lenders will be happier to lend you larger amounts in future. Do this by paying off your card in full every month instead of just paying the minimum.

Other benefits can include payment protection plans when you spend over a certain amount. In the UK, for example, the Consumer Protection Act states that both the credit provider and the retailer are equally liable for your purchases. If you don't feel you got what you paid for, then you should be entitled to a refund.

Credit cards are more secure than cash, many come with attractive spending rewards, and it can be easier to manage your spending habits with banking statements that itemise your transactions (as well as setting yourself credit limits to avoid overspending).

The cons:

If you don't manage your spending properly, you can get into quite a bit of debt with a credit card. Only paying the minimum amount each month just prolongs this debt and adds interest to your loan.

Likewise, cash advances may seem like quick and easy money in your pocket but you'll be charged interest the moment you borrow. This might come at a high rate along with other service fees. Some cards may charge you a fee if you go over your credit limit, if you use your card overseas, or if you make a late payment.

Getting money to your student account

Transferring money between countries can often be slow and expensive. But with HSBC Global View and Global Transfers (GVGT) it's fast and easy (and free) to send money abroad. GVGT lets you make free, instant transfers to other eligible HSBC accounts worldwide. You can transfer up to USD200,000 (or the currency equivalent) per day in many markets.

GVGT also lets you view and manage all of your eligible worldwide HSBC accounts online, so you can keep an eye on your finances at home and abroad.

Ready to open up an overseas account?

If you don't want to worry about overseas transaction or withdrawal fees and will be banking in multiple currencies while studying abroad, consider getting your banking organised before you go. We can help you open an overseas account in more than 30 countries and regions around the world.

Learn more about opening an overseas account