As a student, you may be about to get your first bank account and the temptation to go for the bank offering the biggest free gifts or perks is huge. However, choosing your student bank account is an important step and you should not be thinking about whether to choose between a student railcard or free cinema tickets, tempting as those offers might be.
This is War!
Banks are fighting for your business because they know that today's students are likely to be tomorrow's high earners. Since most people stay with their bank for a lifetime, they want to secure your business before you even start your career. Therefore, they will be trying to outdo each other with great offers from free overdrafts to low interest rates to book tokens.
Tip #1 Don't base your decision on the student orientated gifts, however much you want them.
Purpose of Your Student Account
The purpose of your student account is to enable you to avoid unnecessary expenditure and manage your finances successfully while you are at college. This means that low interest rates and free overdrafts are important.
Tip #2 Consider the best money-saving deal
Borrowed money still has to be paid back
While an interest free overdraft is extremely useful, it's still an overdraft and it still has to be repaid. So use your overdraft and other financial incentives wisely.
Tip #3 Remember that you will have to use your overdraft sensibly
Make Sure You Understand the Terms
It's easy to forget that as soon as you graduate or go over the limit of your free overdraft, you'll be charged interest and these rates could land you in big trouble, increasing your student debt significantly.
Tip #4 Read the fine print
Look at the Bigger Picture
It's important to look beyond your college days, even though that seems a long way in the future. You need to consider the long term implications of setting up an account with a particular bank. What will happen when you graduate? Does the bank have a graduate account with special deals or will you suddenly find yourself with high interest rates? Is there a period of grace to allow you to find a new job? What will happen if you are unable to find a job right away? Of course, policies and rates change, but you can still get a reasonable idea by looking at today's situation for graduates. So be sure to make a list of questions and ask them all to each bank representative before making your decision.
Tip # 5 think about the long-term benefits of the accounts available
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