In a few short months you could be waving goodbye to undergraduate life and embarking on the next stage of your life, especially if you’re leaving university entirely and starting to build a career. Your financial priorities will change, as things like (hopefully) full-time wages, taxes, rent and repaying your student loans come into play, so post-graduation is the perfect time to look at your options and consider switching your current account. This guide will get you started, so you can choose the best graduate bank account for you and get on with finishing your degree, enjoying the last part of university, and job-hunting!
Don’t stick with your old bank
Loyalty really doesn’t pay when it comes to the banks. What suited you as a student won’t necessarily be best for you going forward, and as banks love fresh graduates and their earning potential, they will offer great incentives for switching. That doesn’t mean you should let yourself be seduced by the best freebie; consider all the points in this article before going forth and committing to a particular account. To help you compare graduate bank accounts, start off with this guide from StudentMoneySaver, which outlines the best ones for 2015/16. Check back to the site soon, as the new financial year is coming up and rates for all banks are likely to change.
Look for 0% overdraft
As with student current accounts, the overdraft is key. Graduate accounts usually give you a set limit on your overdraft interest-free,which is important if you’re still overdrawn with your existing student account and/or will still be looking for a job when you graduate, which is unfortunately pretty likely. Look for the biggest, longest-lasting overdraft. Just make sure you don’t go over your limit, as you’ll be heavily penalised. Also, if the account you choose offers 0% interest for three years, budget to ensure it’s all paid off by the time those three years are up.
If you don’t need an overdraft…
You might be lucky enough to be in credit when you graduate, and be secure enough in a paid role not to need an overdraft at all. If that’s the case, a specialised graduate account is NOT for you. Compare the best of the rest , as they usually have better in-credit interest rates and excellent introductory offers. Think hard about your need for an overdraft: if you are likely to need one at any point, in these accounts they tend to be smaller and more expensive.
Graduate loans sound great, but beware
When signing up for an account, you might be offered a graduate loan or a credit card (banks do tend to push their credit cards so they can secure you more firmly as a customer). Don’t take them up on it unless you need to, and you’ve thought it through first. You could be expected to start paying a loan back almost straightaway, or find yourself paying hefty interest on a credit card when you really don’t need one yet. If you’re considering a loan because you’re already heavily in debt you can’t yet repay, get free advice first from impartial resources such as the Money Advice Service and StepChange Debt Charity.
Already graduated? You can still switch to a better deal
You can sign up for a graduate account, or switch your current one, within three years of your graduation. So if you didn’t get one when you first left university, or think you could get a better deal, definitely consider switching, to make the most of your bank account - and your money.