While the economic downturn means most of the population is feeling the squeeze financially, it is worth sparing a thought for those about to leave the relative security of the parental home for university. Most students will be fully in charge of their financial destinies for the first time, attempting to overcome the potential pitfalls that budgeting and bill paying might throw up. Student life is most definitely not all ‘work, work, work’, but at the same time, it is true that most students are likely to end their university life with debts upwards of five figures.
As such, any potential money saving or money making a student can achieve is likely to prove invaluable.
With potentially significant salaries in store for the well qualified, it is unsurprising that the banks act quickly attempting to ensure these big wages are eventually deposited with them - get them on board now, and they should pay their way later, seems to be the mantra.
As a result, student accounts have been known to offer a wide array of incentives, all designed to grab the attention and subsequently seal the deal. Anything from railcards to discounts on CDs and mobile phones to a complimentary make-up lesson have recently been available.
Such dazzling freebies might prove irresistible to some, but much more important in the longer term is ensuring that the account suits your banking needs. Students will typically spend most of their university life in their overdraft, so it is essential to find an account that offers a suitable interest-free overdraft level. Finding out how much it will cost if this level is exceeded is also a good idea.
For those that have trouble controlling their spending urges, some student accounts work on a tiered system. These accounts see the interest-free overdraft level increase the further into the course you go, so that the highest level is usually only available during the final years of study. It’s a simple trick to try to make sure that you don’t spend all of your overdraft in one go.
While the banks are inevitably in it for themselves, the
student bank account does offer certain features that can help smooth the path through university life. It is up to you, however, to make sure that it is not a free trip to the local zoo that ultimately sways your final decision.
Moneyfacts.co.uk is the leading independent financial information provider in the UK. Since 1988, we've been providing impartial information to financial services professionals which has helped thousands of customers get the best deal on their mortgages, savings accounts, credit cards, loans and other personal finance products.
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