One of the most important decisions you’ll have to make before you scurry off to university to start your new life as a student is which bank account to go for. All of the high street banks tend to offer different deals on their student accounts, so before you set off for uni it’s a good idea to set aside a whole day in order to locate the account that’s best for you, and to go into the branch and sign up for it.
Typically students tend to upgrade to a student account with their current bank. Whilst this might seem like a really convenient thing to do, it could actually end up costing you a lot of money. Before you blindly agree to bank with anyone, make sure you’ve done some research as to what else is on offer.
Here are our top 5 tips to consider when choosing a student account:
- Find the bank which offers the biggest 0% overdraft: during your studies you’re probably going to dip into your overdraft once or twice (that’s if you’re not in it constantly for a few years). By going for the largest 0% interest overdraft possible you’ll be incurring the least fees. OF course to some people a 0% interest overdraft is an invitation to spend big – remember you’ll have to pay every penny back at some point. It’s not free money, but it is a good way to borrow if you find yourself in a tight spot financially whilst at university.
- Keep to your overdraft: if you go over the overdraft limit on your account without agreeing with your bank prior to doing so, you could be facing huge fees – this is how banks make their money. Never, ever go over your overdraft – and if you think you’re going to, make sure you call your bank to see if they can extend your overdraft so you don’t get hit with a huge fee.
- Don’t base your choice on the proximity of the bank: lots of campuses tend to have a bank on them. Don’t just open an account with that bank because they’re the closest to you. Remember that most ATMs accept cards from most high street banks, and remember that if you need to do things like move money around your accounts, you can always do it online.
- Remember banks will check your credit history: banks will credit score you by looking at your credit history. If you have no credit history, a poor credit history or a very short credit history, there’s every chance they will decline your request for an overdraft. In such a situation the only thing you can do is seek financial help from relatives, or budget even tighter with any loans or grants that you receive.
- Switch to graduate banking as soon as you graduate: graduate banking is not really advertised, but it does exist. Many students wrongly believe that when their days of studying are up, they have to pay full whack when it comes to overdraft interest rates. This is absolutely not the case, and lots of graduate bank accounts do exist. In most cases they work to reduce you overdraft over a period of 2-3 years, over which time you’ll still get an interest free allowance.
These 5 tips should stand you in good stead when it comes to selecting the very best bank account for you. Remember student bank accounts change most years with different banks offering different terms and different perks. Spend a few hours doing the research and you’ll be rewarded heavily for your efforts.