Graduate Banking Guide 2012/13

Why Should you Look for a Graduate Bank Account?

After you have graduated from university you should be aware that you still have an opportunity to get your hands on an 0% overdraft.

Lots of students wrongly believe that when they’ve graduated it’s time to say goodbye to all the free banking perks – but that’s just not the case. Many high street banks offer special graduate bank accounts, which come with interest free overdrafts. The good thing about these overdrafts is that they tend to reduce year on year – which helps to gently wean you off the overdraft you’ve probably got used to during university.

Graduate bank accounts aren’t heavily advertised!

The fact is that graduate accounts don’t tend to be advertised heavily – because banks want you to switch to a mainstream current account and pay top whack for the privilege. Therefore it’s up to you to do a little digging in order to ascertain whether or not your bank offers graduate banking. If not, it’s not the end of the world because you can always switch over to another bank who do offer graduate banking services.

When it comes to getting a graduate bank account, here are some tips that you should bear in mind:

  • Get the biggest interest free overdraft that you can: if you’re overdrawn you need to be looking to get a graduate account with the biggest possible overdraft so that your overdraft doesn’t cost you. Getting a good interest free graduate overdraft isn’t cause to party though – you need to work really hard to reduce it as fast as possible, so you don’t roll over onto a paid overdraft.
  • Remain within your overdraft: try not to go over your pre-agreed overdraft amount – if you do you could be hit with some hefty charges. It’s important that you see a graduate 0% overdraft as your “get out of jail free card”. You should use the extra time you’ve got with an 0% overdraft to reduce it until you’re back in the red. Overdrafts can be very expensive if you’re not on an 0% deal – so try not to get hooked on one.
  • Look for accounts offering high interest rates if you’re in credit: if you’re not in the red and an overdraft is something that doesn’t factor into your thinking, you should aim to get a graduate account that pays the highest possible interest rate. In actual fact you probably don’t need to worry about a graduate account at all – you’ll probably find a mainstream account offering you high interest rates which is what you need if you’re a saver.

The RBS and Lloyds TSB are currently offering some good deals on bank accounts (including 0% overdrafts) for those students who require that borrowing facility. For those who don’t and who are in credit, Santander and the Halifax both offer some very good interest rates and other joining perks if you want to save your money with them.

Banking is a hidden cost

Most people don’t consider that banking actually has a cost associated with it – but it does.

If you want to be super-thrifty and you want to save the most money possible when it comes to banking you should definitely shop around and consider all of your options. Don’t just stay with the bank you’ve used throughout university because the chances are they won’t be offering the best possible deal. Take some time to shop around and see what other high street banks have on offer, because you could end up saving hundreds of pounds per year!