Heading to university in September? HSBC has been named as the best bank for students by MoneySavingExpert, with Nationwide and Santander following closely behind.

HSBC gets the thumbs up for the free £100 it gives students opening a new account by the end of this year, plus the £1,000 interest-free overdraft for the first year, with the option to potentially increase this to £2,000 in the second year, and £3,000 in the third. However, it does not guarantee it will give this level in the second and third years.

Nationwide’s FlexStudent account, like HSBC, gives first-year students a guaranteed £1,000 interest-free overdraft. But, unlike HSBC, its guarantee extends through the second and third years, so you know you’ll be allowed £3,000 in the third year. FlexStudent also lets students make fee-free withdrawals and purchases when abroad.

Santander’s 123 student account offers the best non-cash freebie – a 16-25 railcard that lasts four years, which normally costs £30 a year and gives a third off fares which could result in substantial savings. Its guaranteed interest-free overdraft is set at a maximum £1,500 for years one to three. It also offers the best interest rate, at up to 3%.

Any student opening a bank account should ask these questions:

Is the overdraft “guaranteed” or “up to”?

While banks dangle large overdraft figures in promotional material, the truth is that not all students get them. Only those with a good credit rating will, unless the overdraft is “guaranteed”.

What are the repayment terms?

An interest-free overdraft is not free money. You will have to repay it at some point after graduating. Most banks automatically turn your student account into a graduate account, but they won’t necessarily continue to offer the generous interest-free overdrafts.

Is that freebie really worth it?

NatWest and RBS give you a card that offers free one-day delivery on Amazon for a year. But Amazon gives six months free to all students anyway, and the extra six months is worth around £30. Lloyds offers a Totum card – the new name for the NUS card which normally costs £32 for three years and gives discounts at many retailers. But the Totum “lite” discount card is free for 12 months.

Is the bank ethical?

Nationwide is a mutual (ie, it has no shareholders) and is often regarded as the most ethical of the major banks. Co-op Bank used to be the best option for a seriously ethical account, but it has suspended its student offer. Ethical bank Triodos offers a current account, but not one designed with students in mind, and it charges an account fee of £3 a month.