Student bank accounts: Graduate accounts
Graduate accounts with interest-free overdrafts
Depending on your bank, you'll be able to retain an interest-free overdraft for at least a year after graduating before you have to start paying interest. However, with graduate unemployment at its highest level since the mid-90s, the longer you're able to keep hold of it, the better.
Six of the accounts in our table (below) allow you to keep your interest-free overdraft for up to three years after you graduate, reducing it in tiered stages. This could prove valuable if you decide to go travelling or are unable to find work right away.
Switch banks when you graduate
It’s important to remember that you don't have to stick with the same bank when you graduate. Even with debts, students are an attractive long-term prospect due to their heavily increased earning potential.
So, if you picked First Trust Bank for its £1,850 undergraduate overdraft facility rather than Lloyds Bank's, which only offers £1,500, you should consider switching when you graduate. Lloyds Bank offers a free £2,000 overdraft at this point, compared with First Trust Bank’s £1,000 overdraft.
Our table shows the graduate accounts available ranked in order of the maximum free overdraft they allow.
|Provider||Max free overdraft year one||Max free overdraft year three||Additional authorised overdraft rate||Access Access help||Customer score Customer score help||Find out more|
|Bank of Ireland||£3,000||n/a||0.00%||54%|
|Bank of Scotland||£3,000||£1,000||16.77%||53%|
|Royal Bank of Scotland||£2,000||n/a||9.90%||53%|
|First Trust Bank||£1,000||£1,000||0.00%||n/a|
Wherever we display an “APPLY NOW” button in the above table, that company pays us a small fee each time someone clicks on the button. These payments do not influence whether a product is in the table, where it appears, or whether it continues to do so. Our Best Rates tables are compiled by our independent researchers. All revenue raised from these tables is reinvested in our research and campaigning work on behalf of all UK consumers.
Customer scores are based on a survey of an online panel of respondents from the general public, who were invited to take part in the bank account customer satisfaction survey - during May 2013. The final sample size was 1,631
Banks offer these for three to five years. They are usually for between £5,000 and £15,000 and you repay them at an interest rate of between 7.9% and 11.9%.This works out less expensive than exceeding your overdraft limit, but is not fantastically cheap. Some careers, such as the law, qualify for longer loans.
Barclays, the Co-operative Bank and the Royal Bank of Scotland offer career development loans, where interest is paid by the government during the period of study.
How we choose our Best Rate bank accounts
Which? Best Rate current accounts offer the best rates on the market for the scenarios we've used. They also have to meet the following conditions:
- The accounts must be available nationally
- The account provider must be fully covered by the Financial Services Compensation Scheme
We analyse the whole market and calculate the cost of the account so you can see how much you're likely to pay or how much interest you'll earn if you choose that account.
Which? Recommended Providers
Which? Recommended Providers are companies that are both rated highly and have products that meet the high standards of our researchers. Which? closely monitors the products and practices of all Recommended Providers and reserves the right to exclude any company that does not treat its customers fairly. Follow the link for a full list of WRPs.
Which? Warning Poor Satisfaction
We also understand that for many people, finding products with the best rate is a priority. But where a product from a provider with a poor customer score appears in our Best Rate tables, we'll highlight this with the warning logo. Our customer satisfaction surveys measure overall satisfaction with the provider in relation to bank accounts, not individual bank accounts offered by the brand. The customer score should therefore not be associated specifically with any individual bank accounts. Only customer scores that are significantly below average and fall into our bottom statistical tier receive our warning. Our customer scores are updated every six months.
By naming and shaming providers which customers judge to offer poor satisfaction in these tables, we hope that companies improve their standards.
Which? Limited (registered in England and Wales number 00677665) is an Introducer Appointed Representative of Which? Financial Services Limited (registered in England and Wales number 07239342). Which? Financial Services Limited is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited. Registered office: 2 Marylebone Road, London NW1 4DF.