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Time to graduate to a new bank

13th August 2014 Print

With more than 350,000 students graduating this summer it’s now time for them and other recent graduates to take a real interest in their bank accounts, industry expert David Black of Consumer Intelligence says.
Graduates need to remember that banks are keen to sign them up as they hope that graduates will stay customers for the long-term but graduates also need to make sure the deals on offer are right for them.
Graduates with existing overdrafts should look for the highest authorised interest-free overdrafts on offer to ease their way into the world of work but it’s important that they also focus on paying off the overdraft by the end of the interest free term.
Special low-rate loan deals for graduates are available to help pay off overdrafts – and if at all possible graduates should avoid unauthorised overdrafts as they will be very expensive
David Black of Consumer Intelligence said: “You don’t have to have your graduate account with the same bank as you had your student account and it is important to shop around if possible.
“That applies to people who have graduated in the past two years as banks really want graduates’ business so there are plenty of deals available.”
Santander’s 123 Graduate Current Account isoffering an interest free overdraft of up to £2,000 for three years.
Anyone needing a loan should take a look at HSBC which offers loans of between £5,000 and £25,000 at 3.9% EAR subject to status but you need to have its current account. You can apply for the loan up to five years after graduation. Its Graduate Bank Account offers £1,500 interest-free overdraft for year one and £1,000 for year two before switching to 19.9% EAR.
Barclays Graduate Additions charges a £7 monthly fee but offers mobile phone insurance and RAC cover. Its interest-free overdraft is up £3,000 in year one and £2,000 in year two. Halifax Student Account provides a year’s interest-free overdraft for a year after graduation.
Lloyds Bank Graduate Bank Account offers £2,000 interest-free in year one falling to £1,500 in year two and £1,000 in year three. Its Graduate Loan is for between £1,000 and £10,000 over one to five years but rates depend on your circumstances.
NatWest Graduate Account offers up to £2,000 interest-free overdraft in year one and £1,000 in year two while RBS Graduate Account offers a similar deal. TSB Graduate Bank Account starts at £2,000 interest-free in year one falling to £1,500 in year two and £1,000 in year three while its Graduate Loan is for £1,000 to £10,000 with rates depending on circumstances.