Graduate bank accounts
Banks will do a lot to win your custom for their student accounts. As well as the usual introductory offers of mobiles, railcards and cold hard cash, you will usually enjoy an interest-free overdraft.
But what happens when you graduate?
Usually you have to give up your student account, but don’t worry. Your bank or building society isn’t ready to give up on you as a customer yet! Most switch automatically to graduate accounts, which are generally available for between one and three years after you graduate.
The aim of a graduate account is for you to manage the debt you have accumulated at university and allow you to pay it off, by extending the interest-free period and offering low-cost loans.
Beware though – some loans will be advertised as having ’preferential rates’ for graduates, but it’s always worth shopping around for the best deal. Also, remember that it’s better to pay off your debt as soon as you are able to, so be wary of taking out additional loans if you don’t need to.
Here’s a comparison chart of the latest deals from the major high street banks (correct as of 25 September 2007).
| Bank | Account lifespan | Overdraft | Loans available | Other benefits |
| Abbey | Three years | £2,000 interest free, decreasing over three years | Up to £10,000 available at preferential rates | Overdraft Manager helping you pay back student loans |
| Halifax | One year | Student account with up to £2,750 interest-free, continues for 12 months after graduation | No tailored graduate loans, small loans available for 15.6% APR | Student credit card with £500 credit limit available |
| HSBC | One year | £1,500 interest free for 12 months | Up to £25,000 at preferential rates | Graduate mortgages at preferential rates, discounts on insurance and further overdrafts |
| Lloyds TSB | Three years | £2,000 (first year), £1,500 (second year), £1,000 third year) | Low-cost loans of up to £10,000 | Credit card with at least £500 limit, and commission-free travel money |
| NatWest | Three years | Up to £2,000 (first year), £1,500 (second year), £1,000 (third year) interest-free | Preferential rates on loans up to £15,000 | Discounts on holidays, flights, travel insurance and commission-free travel money |
| Royal Bank of Scotland | Three years after graduation | £2,000 interest free (first year), £1,500 (second year), £1,000 (third year) | Up to £15,000 at tailored rates, and deferred payments for 12 months | Discounts on holidays, commission-free travel money, gigs, restaurants and books |
As always, there’s no tie-in for current accounts, so choose the best deal for you. For more information, visit each bank’s website.
