Choosing A Student Bank Account

Choosing the correct bank account before you become a student is a big decision that will most likely have an effect on the remaider of your life. There are many things to consider before taking the plunge, which we have detailed below.

• Interest on money in your account if you are in credit (no overdraft) - this will increase your savings.

• The amount of any interest-free overdraft (how much overdraft you can have without getting permission from the bank and without paying any extra interest).

• The amount you may be allowed for authorised overdrafts (these are overdrafts & loans that you must discuss with the bank first & there will be monthly charges). If you know that you will have an overdraft before it happens, it will probably save you extra charges if you discuss it with your bank.

• The charges on authorised overdrafts & loans - these vary from bank to bank. The charges on unauthorised overdrafts & loans. These are overdrafts where you have not received permission from your bank in advance & the charges are much higher.

• The qualifying period after graduation (to stay in the same account, which will probably have better rates than other accounts). Many of the banks now have an option to move to a graduate account which may also have better terms of interest or charges than an ordinary account, especially if you are still paying off an overdraft or loan.

• Although incentives are useful, good interest rates & low charges are usually more helpful in the long term. Most people find it difficult to change banks once they've opened an account, though as bank account rates often change, you may find that it is better to compare banks & review your account every year or so.

• If there is only one bank near you, check out their rates with other banks & you may find that telephone or Internet banking with better rates suits you better. The other option may be to open a second account, although this may make managing your money more difficult. Some student accounts may expect you to pay in any student loan to their account.

Other Considerations

Availability

• how easy is it to find ATMs (automated telling machines or
• cashpoints) or branches?
• is there a free or local rate telephone banking service?
• do you want or need online banking services?
• is there Saturday or late night opening?
• how & where can you deposit cash & cheques

Services

• does your local branch have a specialist advice service?
• are there any charges if you use another bank's cashpoint?
• can you set up standing orders & direct debits for you to make regular payments?
• what other services are offered, e.g. ethical approach to
• banking, share dealing, small business advice etc.?

 

Read Part 2 Student Credit Cards