UK Graduate Bank Accounts Analysis
Personal_Finance / UK Banking Jul 18, 2011 - 05:39 AM GMTBy: MoneyFacts
As another academic year closes, many graduates are leaving university uncertain of their future. Unemployment remains high and could increase further once public sector cuts are fully realised, leaving limited job opportunities for graduates.
The transition of moving from full time study to full time employment can be a difficult period, but its important graduates prioritise on tackling what is likely to be a large student debt.
Michelle Slade, spokesperson for Moneyfacts.co.uk, comments:
“After years of studying, it is unlikely that sorting out their finances is the first thing on graduates’ minds, but with many leaving university owing a five figure sum, finding the best graduate account for their circumstances could help save them money.
“Many graduates will inevitably remain loyal to their student account provider, but there is no reason why they can’t switch to get a better deal.
“The interest free overdraft of a graduate account is the most important element.
“By finding an account offering as much of an interest free overdraft as possible, graduates can ensure they don’t pay more interest than they need to.
“Most graduates will have more debt than the interest free limit, so finding an account charging a competitive rate on any additional borrowing is vital.
“The Barclays Bank Graduate Additions account charges a £7pm fee, but the additional £1,000 interest-free overdraft in the first year compared to other non fee paying accounts makes it worth considering.
“Many accounts offer incentives in order to attract your business, but they should be a bonus and not the reason for selecting the account.
“Graduates shouldn’t bury their heads in the sand over their debt. By working out exactly how much they owe, they can set themselves a monthly budget and decide how much they can afford to repay.
“As with any debt, paying off those charging the highest rates of interest first is key.
“Credit card debt is typically the most expensive and should be repaid first, while the interest payable on a student loan is much lower.
“Graduates are key targets for banks, as many will go on to well paid jobs and will likely buy other financial products such as mortgages from them in future.
“Most banks offer specialist advice services for graduates, which will offer invaluable advice for anyone struggling with student debt.”
Graduate Accounts
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