Hurry while student bank account deals last

Students should look beyond the freebies, incentives and discounts being offered by most of the high street banks this autumn, and select an account on the basis of a more important feature - which for most will be the size of the interest-free overdraft, says leading independent financial research company Defaqto.

In terms of the main offerings this autumn, Halifax comes out top with an interest-free overdraft of up to £2,750 for five years.

But students should note that the figures in the table state ‘up to’ and not everyone will be eligible for these maxima in practice. Even students are assessed for their creditworthiness.

In addition, with the exception of Halifax, all of the banks offer less in year one than in year four.

However, these offers still represent a fantastic deal and should be exploited while they last. Even if you don’t need an overdraft, you could take the money and reinvest it in an ISA or other tax-free savings account.

Defaqto has identified the most common options people might want to consider in their student account choices, including the size of the interest-free overdraft, and developed a comprehensive product comparison tool called “Compare!”.

“Compare!” goes beyond price and enables the user to compare product features in a simple 'traffic light' table.

To use the Compare! Student Accounts tool please visit: find.co.uk

David Black, principal consultant – banking, Defaqto said: “These special offers on student bank accounts may soon become a thing of the past, as banks realise that their student customers will not necessarily remain with them for ever, due to fierce competition and the ease with which you can switch banks these days.

“Another reason why special student bank accounts may become less generous is that banks are increasingly concerned about consumer debt and have to be seen to be lending responsibly."

Kate Marsden, marketing director, Defaqto added: “Students should definitely look past the gimmicks and select an account based on the terms and conditions of the free overdraft, as this is what will be of most use to the majority of students.”