Current Accounts: Student Bank Accounts

Student bank accounts are usually far more generous than ordinary current accounts, so if you're about to toddle off to university, go for one of these. Although it's handy to have a branch on or near your campus, thanks to telephone and internet banking, it's no longer a necessity (so long as there's at least one local cashpoint you can use).

Look for an account which offers free banking with no or low interest on overdrafts - 0% on the first £1,000 is fairly common for year one. Make sure you know what the charges are for unauthorised overdrafts though - for students this is an occupational hazard!

Watch out for the gimmicks and inducements often offered to new students - some banks offer iPod Shuffles or MP4 players, but these incentives cost you a lot more in poorer terms and conditions, such as smaller interest-free overdrafts. Other accounts come with discounts at selected stores, but normally this just means you go out and spend more at expensive shops that you wouldn't usually visit, and then you'll pay interest on your purchase anyway, because you don't have a large enough interest-free overdraft.

Focus instead on what counts: the interest rates and borrowing limits!

Next article: Packaged Bank Accounts

Published on November 20, 2006