Students, It’s Time to Prepare Your Finances for the Years Ahead
Personal_Finance / Student Finances Jul 25, 2017 - 05:05 PM GMTBy: MoneyFacts
As we approach a brand new academic year, prospective students and those ready to graduate might be considering the most cost-effective bank account that will cover their day-to-day needs. Choosing a good student bank account and finding out how to manage finances will be an essential part of life, especially for those who will be living away from home for the first time.
The latest analysis by moneyfacts.co.uk highlights some of the most essential elements when it comes to choosing the right student account and how students can prepare themselves for the years ahead.
Rachel Springall, Finance Expert at moneyfacts.co.uk, said:
“There can be a fine line between choosing the perfect student account for someone’s circumstances and accidently picking a poor account if it’s not thought through. As with any bank account, the best deal entirely depends on how someone uses the account. While students could be tempted by an account with perks, it may not end up being the most cost-effective choice over the next few years if they don’t make use of them.
“One of the most appealing features of a student account could be the interest-free overdraft, which can be a lifeline for those unable to earn an income that sufficiently covers their expenses. Currently Halifax and HSBC are the banks that offer the most generous interest-free overdraft facility of £3,000 upfront. However, as with any bank account, it’s worth noting that the advertised overdraft limits are not a guarantee as applicants will be credit checked, so having a good credit score is important.
“Students shouldn’t assume that their campus branch will provide them with the best package for their needs, as this convenience could cost them. Instead, students would be wise to swot up on what’s available to them and compare every incentive before they pick an account. Whilst living away from home and overseeing their own finances may seem daunting, it’s worth remembering that most banks and building societies now offer ‘on the go’ banking. Mobile apps and online access can mean a branch on their doorstep might not be as essential as they may think.
“Two of the most lucrative incentives for those looking to reduce the cost of travelling across the country would be a railcard (available from Santander) or a coach card (from NatWest). It can be an expensive commute to visit family members or to fit in a mini-break, so any savings to be made here will be highly attractive.
“If it is possible to fit in during the years of study, then getting a part-time job throughout breaks would be a great way to earn an income and reduce what they may owe on their overdraft. A sizeable overdraft can be all too much of a temptation, but it will need to be repaid when students graduate, so using it sparingly is important. There are some accounts which spread the overdraft facility to students over the years of their study, which can be a much more sensible option for some.
“Once students graduate, they would be wise to compare accounts again and not assume that their current provider will offer them the best possible graduate account. Some of these accounts will offer interest on balances and cashback on spending, which will come in handy when they are earning a decent wage - it will certainly be refreshing once they get their account back in the black.”
- Table of accounts attached and below
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