Latest News
Savings
Graduates Gain Saving Power
If you have recently graduated you may be surprised to hear that banks place a greater value on your custom than anyone else's. However alarming the state of your student debt ravaged finances may be you should take heart from the fact that at this early stage in your banking life all the major high street banks will be particularly keen to get you on board.
The reason is fairly obvious - banks often see young people who arrange an account remain loyal for many years. Banks can typically rely on the fact that their customers, whether through laziness or apathy, are unlikely to shop around for alternatives. It's an interesting form of brand loyalty that often means banks can get away with offering non-competitive financial products to established customers who will none the less buy into them without even checking out the competition.
The good news is that with the potential of a lifetime of lucrative custom at stake, the major banks are often willing to appeal to young account-holders with student and graduate accounts that offer considerably better terms than an ordinary bank account. If you've just graduated now is a great time to assess your options - don't fall into the trap of sticking with your current bank for convenience sake, the fact is there are loads of decent graduate accounts out there so you may as well shop around.
What you should be searching for ahead of anything else is an account with a high interest-free overdraft. The best deals available at the time of writing were offering a £2000 interest free overdraft in the first year (The RBS current account and the Natwest current account for graduates account both offer £2000 interest free for the first year although the RBS account offers the better long term deal with year two and three at £1500 and £1000 respectively compared to £1000 and £500).
By opting for a competitive graduate account that maintains a good interest free overdraft over the full three years (some accounts offer a one year 0% overdraft only, HSBC offers none at all) you could possibly save hundreds of pounds whilst giving yourself an invaluable buffer and opportunity to pay off debts. The one thing to remember however is not to fall into the trap of sticking with the same bank after your graduate account expires.
It really is worth the small effort of consistently reassessing your situation, comparing your deal with other products on the market (There are multiple comparison sites out there, Motley Fool for instance have comparison tables for everything from loans to credit cards) and not being afraid to change. By having an inflexible attitude to who you bank you're as good as throwing money away.