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Find the best graduate bank account
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More than 200,000 students graduated this summer with many thousands of pounds in debt, at which point the journey of repaying that money begins. Start out as you mean to go on
It often takes years to be debt-free after university but the good news is there are ways to keep interest payments to a minimum. Just as banks fight for the custom of first-year students, the graduate market is also highly competitive.
If you’ve had a student account, your bank will automatically change it to a graduate proposition. However, many new graduates, particularly those with overdrafts, wrongly assume they have to stick with the same bank they had their student account with – this is not the case so it’s well worth scouring the market to see if you can get better terms elsewhere.
While some of the banks will offer add-on perks and rewards, at the end of the day it’s usually the overdraft facility which is the most important feature for indebted graduates.
What’s available?
Most of the major high street banks have accounts tailored for graduates. But the overdraft available, interest rate charges and other perks on offer to customers do vary widely, so it pays to shop around – particularly because you’re likely to stick with the same bank for many years to come.
earn more interest
NatWest, Royal Bank of Scotland, Lloyds TSB and Abbey, for example, are among the most generous with their graduate offerings. They all provide graduate customers an interest-free overdraft facility of up to £2,000 for three years.
Barclays, in contrast, offers up to £1,500 interest-free for two years. But experts at comparison website moneysupermarket.com warn that recent graduates need to be careful not to overstep their agreed overdraft limit because the interest charged on unauthorised borrowing is steep.
Royal Bank of Scotland, for example, charges 29.84% on unauthorised overdraft borrowing, and Abbey charges 28.7%.
