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The best student bank accounts By Rachel Williams
Banks traditionally use freebies to entice students to open accounts with them, but however good they are, this should be the last thing that freshers think about when choosing an account. It doesn't take a first in maths Given that students are unlikely to be rolling around in cash, they are better off going for the cheapest account. For anyone who depends on an overdraft, banking is anything but free. So what should students be looking for? First and foremost, students need to check how much they can borrow interest-free. First-years with Abbey and HSBC, for example, only get a £1,000 interest-free overdraft, rising to £1,500 for third-years. The Co-operative meanwhile offers £1,400 to first-years, increasing to £2,000 for third-years, while Halifax offers up to £2,750 whatever year you're in. Those who bank with Yorkshire Bank don't get free overdrafts at all. The next check is the interest rate on authorised overdrafts in excess of these levels. These vary from 3% with HSBC to 9.9% with Abbey. Whatever account you hold, it's worth speaking to your bank when you need to extend your overdraft - fail to get an authorised overdraft and you'll be stung by interest charges that average around 30%. Some banks also charge a fee - up to £30 a day with Lloyds TSB. With charges like that it will only take one slip to wipe out the £25 incentive it offers students to open accounts in the first place.
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