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Student accounts to write home about

Student accounts to write home about

Category: Banking

Updated: 19/08/2010
First Published: 17/08/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

With students old and new likely to have to juggle work, rest, play and study more than ever before this year, it is important to find an account that suits your particular needs.

With the Bank of Mum and Dad increasingly drying up, students are turning their hands to all manner of jobs, pulling in an average of almost £100 a week, according to Lloyds TSB.

More than 34% of students will work in term time to fund their studies this year, meaning a collective total of £4 billion will be earned.

In fact, with an average working week of 14 hours, many students will spend more time working than in lecture halls and theatres.

However, with figures from NatWest showing that more than one in four students are receiving less financial help from their parents and almost half (48%) not receiving any funding, finding an account that lends a helping hand could still be the best course of action.

An account that offers an interest free overdraft is usually the best port of call, as a slew of expenses – tuition fees, housing costs and books – can often arrive all at once.

Halifax offers students the highest interest free limit at £3,000, although not everybody will need access to so much money.

If your costs are likely to get more expensive as you progress through your university course, then a student account from The Co-operative Bank could be the one for you.

It offers students a £1,000 interest free overdraft in the first year of their course, £1,700 in their second year and £2,000 in their third year.

Those who are embarking on longer courses, perhaps taking in a foundation year, may wish to stagger increases in their interest free overdrafts over five years.

Santander offers such a product, with the limit starting at £1,000 in the first year and ending at £2,000 in the fifth year.

When shopping around for a student account, it can be easy to be swayed by incentives such as cinema tickets, money off electrical goods, or breakdown cover.

While these extras may be of some use, they should not sway a decision either way.

It is also advisable to be sure of charges levied on unauthorised borrowing as breaching your interest free overdraft limit can quickly become costly.

Lastly, credit cards given out with student accounts should be viewed as a last resort in emergencies, especially if you do not have a regular income that can be used to pay down the balance.

Even a relatively small amount of debt can take years to pay off if only the minimum payment is made.

Check out the Moneyfacts.co.uk Best Buy tables to find the student account to suit you.

Compare student bank accounts

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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