For many of us the prospect of university is the first time we really start to think about our finances and decide who to bank with. Banks realise that if they can get our custom at this stage then they may have us for life. It’s for this reason that so many of the student current accounts offer great gifts.
If you’re off to university this autumn it’s important to think about what you’re going to want to get out of your bank before you jump at the first bank to offer you a series of gift vouchers you’ll probably never use.
Dropping into the red
For most students it’s not the gifts that they should really be looking at but the availability of an overdraft facility. Amongst the big high street banks there are a few options to choose from. Barclays for example will offer students up to £1000 in their first year and then up to £2000 interest free in their final year. HBOS is willing to offer the most, as much as £3000 for students at any point in their university career.
Remember that these overdrafts come with a health warning, you will have to pay them back at some point and although most of the banks will give you a couple years to do this if you leave it too long they may not be interest free.
Buck the trend
For those students determined to keep their balances in credit there are a couple of options which will make your money work harder. HSBC will pay out 6% credit interest up to £1000 while, Lloyds TSB on the other hand pays just 0.8%.
If you think that the chances of you need an overdraft are slim then why not opt for a regular high interest current account. There are some fantastic deals available at the moment all of which will be the student offering. Both Alliance and Leicester and Abbey have deals paying 8% or more on credit balances up to £2500.
Show me the freebie
If you are going to go down the incentives route then there are some pretty good offers. Lloyds for example will give you £20 cash when you sign up and a further £80 if you recommend a friend to them, their account also comes with little extras such as membership to the Youth Hostelling Association.
When it comes to freebies however it’s NatWest which stands out above the competition. They offer a 5 year Young Person’s Rail card which is worth £120 in itself before you take into account the savings you’ll make.
Learn before you leave
With financial education and debt such a government priority, those would-be students would do well to get into the studying habit by researching their financial options before they commit to an account. Get into the habit of being financially savvy before leaving for uni and know how to avoid the obvious pitfalls such as overdraft charges and learn to budgeting errors!