Finding the Right Graduate Account

By: Nektaria Stamouli
14-May-2010

The end of the academic year is fast approaching and for many students this means that graduation is coming. Leaving university means end of carelessness and entering a period with more responsibilities and duties. Usually there are quite a few things to consider after leaving university and changing your bank account or switching to a graduate account can get forgotten.

However, shopping around and picking the best graduate account can actually save you loads of money, which can be really helpful at the beginning of your 'real life'. Graduate accounts are effectively current accounts that give time to find your feet. Finding a job, relocating or even buying a new house or a car, are only some of the changes that life after university can bring.

The graduate accounts try to make the move as easy as possible, usually by offering a wide range of benefits such as: interest-free overdraft, low cost graduate loan, credit card, mobile phone and online banking. They last up to three years after graduation and most of the times the credit ability they offer for at zero percent interest is shrinking year on year over this term.

From student to graduate

Usually your bank will give a thirty days' notice before transferring you from a student to a graduate account. This is the stepping stone in which you should repay all the overdraft debts your student life might have left you with. Most graduates usually decide to stick to the same bank, in which they had their student account- because they have the sense of loyalty or of uncertainty, or simply because searching the best bank deal is the last thing they have on their minds.

This usually can cost you money. If you have proof of your qualification and you have operated your student account within the agreed overdraft, then there is no reason why you stick to the same bank. You can special graduate account offers in the market that are willing to prolong interest-free overdrafts for up to three years after university.

On the other hand, if you have been loyal to the same bank for a long period and you don�¢����t feel like changing, you can access them with a good deal that you may have found in another bank and ask them to match it. For them having loyal customers is even more important than luring new ones.
You shouldn't switch to another bank for a graduate account only if you failed to complete or pass a course. While the current bank will automatically transfer you to a graduate account on the course's set completion date, a new bank will demand proof of graduation.

What to consider when choosing your account

First of all, you should compare the interest free overdraft limit, most of the times offered for three years. It is ranging from 1,000 to up to 3,000 pounds in the first year. As noted before, these limits are getting trimmed over the three years period.

You should aim for banks that offer the biggest and longest zero per cent overdraft facility. And once you find that, make the best out of it. Use of your free overdraft while you have it for as much as you can and do not use credit cards or store cards that cost you money.
 
If you have any debts -other than student loans, which are usually very cheap - a long lasting free overdraft is the cheapest way to borrow. Having no interest means that any spare money can be used to replace the actual debts. On the other hand, if you donÃ?¢Ã?Â?Ã?Â?t have any debts and you donÃ?¢Ã?Â?Ã?Â?t need to use the full limit, you can place the rest into a high-interest savings account, or buy premium bonds until the overdraft runs out. 

You should also check what is needed as proof that you are a graduate. It may be that you need to be in a full-time job, or need to apply within a set period of time after graduating, and some banks will need proof of graduation.

Furthermore, you shouldn't get swayed by the incentives and freebies on offer. This is the main difference between a student and a graduate account. Student accounts are often very similar in terms of basic account features, with the main points of difference coming in the form of attractive free gifts.  With graduate accounts, this is not the case and your eye should be firmly on the money. Only a few graduate accounts offer incentives - usually in the form of breakdown cover, mobile phone insurance and other related products - and you should remember only to consider these if you are actually going to make use of them. Try not to get lured by them, as the account charges may eat away any benefit they might offer you.

All in all, time that you take to choose the best graduate account could prove to be time well spent. So shop around now and find the best deal for you!

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