Top tips for choosing a graduate account
Should I get a graduate account after university?
Finding a job is likely to be the first thing on your to do list, but what you do with your cash once you start earning is almost as important. Getting the right bank account from the word go can save you lots of money.
You won’t be able to keep your student account forever so you need to talk to your bank ASAP to find out how you can keep your overdraft interest free. That’s likely to mean switching to a graduate account.
What to ask your bank once you’ve graduated:
• When will I start to be charged interest on my overdraft?
• Will I be automatically upgraded to a graduate account?
• Will I have my overdraft limit reduced? If so when will this happen?
• What deals do you have on graduate accounts?
Once you know what the deal is you can decide what to do next.
The difference between a student account, a graduate account and a regular account
The biggest difference between them is the overdraft. Think of it like this:
• a student account increases your interest free overdraft limit each year until you graduate
• a graduate account will match your interest free student overdraft to start with but cut your limit each year
• a regular current account will usually charge you interest and fees on your overdraft
Loyalty doesn’t pay
Most banks will automatically turn your student account into a graduate account but you don’t have to keep it. Look at where you can get the best deal and switch; it’s really easy even if you’re in your overdraft.
Banks are hungry to have you as a new customer, so make the most of it and make switching accounts a lifelong habit. Just be wary of the extra products they’ll try to sell you – despite what they’d like you to think, they’re not doing it to be nice.
What to check for on graduate accounts:
• Do I get an interest free overdraft and if so how long for and how much?
• How quickly will the interest free overdraft reduce?
• What are the account fees?
• Is the account compatible with Android Pay and Apple pay?
• What’s the bank’s app like?
• Do I have to pay in a certain amount each month or set up direct debits?
Go for the account that gives you the best deal and ask to switch. This guide about graduate accounts explains how.
Use your overdraft wisely
Make the most of your interest free overdraft while you still have it. If you ran up credit cards that you’re paying interest on then use your overdraft cash to clear it.
Afterwards pay it off as quickly as possible and aim to clear it before you’re charged interest. Once your overdraft is no longer interest free, it’s one of the most expensive forms of borrowing.