Student bank accountswhat you need to know
Did you know that you’re really popular (with banks). They all want your pots of gold, otherwise known as a maintenance loan. After you initially set up with them, they will provide as many useful services as they can and hope that this will bring about a loyalty between the both of you that will keep you with them and you’re (hopefully) growing income.
There are loads of banks to choose from and it can all get a bit confusing but we’re here to help you with all the commotion and confusion.
The do’s and dont’s
1. Don’t be loyal
This might come off sounding mean but bare with us. This is a trap that most students and people in general get stuck in. Once you set up a bank account as a student, you are most likely to stay with them for a long term period for its convenience or because that bank teller was always nice to you. This is a NO! It may seem harsh but could you get a better deal, interest somewhere else?
The bank itself does not help you personally unless you ask of them. They provide a service for the communal group of people that sign up to them.
There is a good chance that the bank you are currently with is a good bank or has the best programme for you, but if not, maybe it would benefit you and your financial health in the long or short term to move to a better or different bank.
2. Don’t follow the heard
A very common path for students looking for there first bank account is to look at what there friends are doing or what their parents banks. A great source of information may come from talking to your friends and especially your parents (as uncool as they are), however don’t solely rely on this information as you may find a better deal for yourself elsewhere.
3. Who doesn’t love a freebie?
Everyone loves a good freebie! However as much as you get that good feeling when you get your hands on that freebie, don’t go rushing in. As nice as that £30 amazon voucher for joining up with a bank is, is it really worth it? Make sure you choose the smart freebie. Be smarter than the banks!
Your best option is to look at banks that offer incentives for the long term. They might not seem ideal at first but if you can rack in a high interest account with 0% overdraft, your future self may be giving you a high-five.
There are student bank accounts with other types of mid-long term incentives that could be even more beneficial for you. If you are a student who takes the train a good amount through the year, Santander offer a free 16-25 railcard. This maybe a good freebie to get as you could save a large sum of gold when travelling back home to get your laundry done.
4. Get the biggest slice of Overdraft you can
You’re probably thinking, ‘Shouldn’t it be the other way round, get the smallest account to not get into debt?’ Well as nice as that sounds it’s not that realistic. Get the biggest overdraft account you can, even if you don’t need that large an overdraft at first, it may come in real handy later. With student accounts having 0% interest you are essentially gaining free money while a student (you will have to pay it back after you graduate!). So as long as you’re responsible, it may save your back one day.
A trick many people don’t realise at first, as freshers weeks takes over your body is that you could use your overdraft however you like! And NO we don’t mean to buy drinks, party all day everyday or shopping sprees. We mean, you could use that money to start a savings account, a high interest account or even an ISA.
A trap I fell for early was the ‘guaranteed’ or ‘up to’ fine print. Make sure you check or ask the details of your student account and overdraft. Is the overdraft up to £1500 or is it guaranteed at £1500? I fell for the up to fine print as I must’ve missed my appointment with specsavers and had to call for reinforcements from The Royal Bank of My Parents until my next payday.
5. Know your Repayment date
Make sure that when you’re putting your birthday plans into your diary that you’ve also lasered in the repayment date for your student overdraft.
Once your student account closes, the bank will ask for repayment of the funds they gave you. This can be at anytime that you had initially signed with them, when opening your account. Most banks will turn your student account into a graduate account that allows you time to get your first few paychecks to pay back the overdraft.
6. What are the best student bank accounts? – COMING SOON
Leave a comment below with your tips and thoughts.
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