Best graduate bank accounts 2017

Author photo

By in Graduates, Student Banking. Updated March 2017.

Get to grips with graduate banking and you'll be better off for up to three years after uni. Ditch the fees and switch to a better deal – here's how!Graduate Bank AccountsFrom 0% overdrafts to freebie incentives, student bank accounts are pretty good at pulling in the punters.

Graduation doesn’t have to mean the party’s over, either! We’ll show you how to milk the student banking perks by grabbing yourself an account specifically catered for those post-uni.

You can be eligible for a graduate bank account for up to three years after your course ends, so even if you didn’t get round to setting up your grad account fresh out of uni, you could still reduce the costs of any lingering debt by taking those steps at a later date.

Ditching your current bank and switching to a new one has never been easier – check out our tips and graduate account comparison below!

There's also a chance you'll qualify automatically for an additional year on your Student Bank Account after graduation, depending on your bank. More info in the table below!

7 tips for choosing your graduate bank account

If you were reaping the benefits of a Student Bank Account whilst studying, it's likely that your account will automatically transfer into a Graduate Account with the same branch.

But is your bank offering the best deal to graduates? Remember these factors when doing doing your research!

  1. Don't be loyal to your bank

    Stolen Bank Card FraudThis might sound like bad advice, but when it comes to banks – trust us on this one!

    We all tend to have this impression that we should be loyal to banks and that our loyalty will somehow pay off. Unfortunately, in reality this isn't the case at all: staying with the same bank for a long time generally doesn't come with any perks, but rather the perks are normally preserved for new customers who enjoy introductory rates as an incentive for switching.

    Switching bank accounts has also never been easier! Since 2013, a ‘seven-day switching‘ scheme was introduced to the UK banking world, meaning that (provided both banks are signed up to the scheme), all of your ingoings and outgoings will be switched from one bank to another internally, meaning you don't have to lift a finger.

    We would recommend that you regularly review your bank account terms and rates, shop around, and switch to a better deal at any time if something better comes up.

  2. Go for the longest 0% interest overdraft you can find

    0% off itemsIf you've graduated in the red, sourcing the graduate account offering the longest 0% overdraft should be your main aim – but don’t be tempted to rack-up more debt than you already have with this.

    Whilst the main aim of your student bank account was to allow you borrow in order to get through your money-tight university years, the raison d'être of a graduate account is to give you a few years to gradually pay off what you owe before it starts gaining interest (welcome to the horrible world of grown-up banking and regular interest rates!).

    Think of your new grad account as a dwindling parking meter: your strategy should be avoiding borrowing costs (interest and charges) while clearing any a negative balance before your permit expires. The longer the overdraft term, the more time you’ve got to clear your debts (and the longer you’ll have to practice some self-discipline!).

    Warning: Note that the two or three years of 0% overdraft that you'll be offered with your graduate bank account will be calculated from the date you graduate, not from when you set up your account.

  3. In credit? Focus on perks!

    perks of being in creditIf you find you tend to be good at budgeting and are able to stay out of the red, well done! In this case, we recommend focussing on finding an account with a decent interest rate on positive balance, which will give you more bang for your buck.

    Other incentives like cashback on your spending, pay outs for switching banks and extra freebies are also always worth a look into, too (but don't let one-off freebies cloud your judgement too much).

  4. Check your credit rating before you apply

    Credit scoreBefore you make your decision on which account to go for, it's worth taking the time to check your credit rating. Most of the 0% overdraft facilities you'll find in graduate accounts will be variable (e.g. “up to £2,000”) so it's possible that you won't qualify for the full amount, depending on how your credit rating is looking.

    Banks will use your banking history (past borrowing, income stream, etc.) to decide how high your 0% overdraft limit should be. If your credit rating isn't great, you'd be worth scoping out an account that offers a guaranteed overdraft amount and isn't based on your rating. Alternatively, you can also try a few steps to improve your rating.

  5. Budget to clear your overdraft ASAP

    happyDon’t use the interest-free overdraft as an opportunity to spend more money – use your graduate account as a last chance to pay back what you already owe before you start gaining interest on it.

    Say you’re £2,000 into a 0% overdraft and know you’ll have 2 years to pay it off. You’ll need to budget around £20 a week to clear your balance.

    Again, remember that although interest-free overdrafts on graduate bank accounts normally last around three years, this three year period is calculated from when you graduated, not when you set up the account. 

    Therefore, whilst it is possible to set up your graduate account a year after graduating, you'll fall straight into the second year overdraft limit, which is often lower than the first year. You could see your 0% graduate overdraft drop by up to £1,000 each year on some graduate accounts, so plan for this.

  6. Never go over your overdraft limit

    never go over your overdraft limitIf you go over that arranged overdraft limit, you could be looking at daily charges, added interest, and additional charges for each transaction (whether the bank honours the payments or not).

    It’s expensive and only in turn makes your debt even harder to clear, so avoid this as much as you possibly can.  Plus, if you consistently mismanage your account the bank may even reduce or remove some account features (including your overdraft limit).

  7. Beware the graduate loan

    Loans not saving moneyIt's likely you'll be offered a bank loan as part of your grad package as these are quite common, but think carefully before grabbing the cash.

    Some banks are even offering up to £25,000 to graduates, which is a lot of cash (and therefore also a lot to pay back!).

    Commercial loans work quite differently to student finance – for one, you may be expected to start repaying the money almost immediately. Unless you’ve got a guaranteed income, this could be more stress than it’s worth.

    If you’re considering a loan because you’re already in over your head with debt, get free advice from StepChange Debt Charity first.

Top graduate 0% overdraft accounts

Here’s our pick of what’s on offer to graduates right now but, as always, read the small print for yourself.

Warning: You might not necessarily get the full overdraft allowance that's advertised in the following tables as the amount you receive is judged on a case-by-case basis. The amount that you get interest free may also drop for each year (specified below) and will be counted from the year you graduate, not from when you open the account.

2017 graduate bank accounts ranked by best value

RankBank Account0% Overdraft*Arranged Overdraft FeeUnarranged Overdraft FeeIn-credit InterestReview
1. Santander
123 Graduate Current Account
Up to
£2,000 Breakdown
Year 1: £2,000
Year 2: £2,000
Year 3: £2,000
See fees
NA
See fees
£5 daily charge (max. 10 charges a month) + for each item either £5 if payment was approved or £10 if it bounced.
1% £100+
2% £200+
3% up to £2k
More
2. Lloyds
Graduate Account
Up to
£2,000 Breakdown
Year 1: £2,000
Year 2: £1,500
Year 3: £1,000
See fees
19.89% EAR + £6/mth.
See fees
19.89% EAR + £5-10/day
0% More
3. Nationwide
FlexGraduate Account
Up to
£2,500 Breakdown
Year 1: £2,500
Year 2: £1,750
Year 3: £1,000
See fees
None
See fees
None
1% up to £1k More
4. NatWest
Graduate Account
Up to
£2,000 Breakdown
Year 1: £2,000
Year 2: £1,000
Year 3: £0
See fees
17.81% EAR
See fees
£6/day (max £90/month)
0% More
5. HSBC
Graduate Account
Up to
£1,500 Breakdown
Year 1: £1,500
Year 2: £1,000
Year 3: £0
See fees
19.9% EAR (plus £25 to make a request).
See fees
19.9% EAR (plus £25 to make a request).
0% More
6. Barclays
Higher Education Account
Up to
£1,500 Breakdown
Year 1: £1,500
Year 2: £1,000
Year 3: £0
See fees
50p/day for £1,000 - £2,000, £1/day for £2,000+ (max. £3,000)
See fees
£8/day
0% More
7. TSB
Graduate Bank Account
Up to
£2,000 Breakdown
Year 1: £2,000
Year 2: £1,500
Year 3: £1,000
See fees
19.89% EAR + £6/mth.
See fees
19.89% EAR + £5-10/day
0% More
8. RBS
Graduate Account
Up to
£2,000 Breakdown
Year 1: £2,000
Year 2: £1,000
Year 3: £0
See fees
17.81% EAR
See fees
£6/day (max £90/month)
0% More
9. Halifax
Student Current Account Cont.
Up to
£3,000 Breakdown
Year 1: £3,000
Year 2: £0
Year 3: £0
See fees
7.2% EAR
See fees
24.2% EAR
0.1% More
10. Coop
Student Account Cont.
Up to
£2,000 Breakdown
Year 1: £2,000
Year 2: £0
Year 3: £0
See fees
9.9% EAR
See fees
18.9% EAR
0% More


Always make sure you're still getting the best deal by regularly comparing and switching! The top graduate bank accounts change each year (along with this page). Join our free newsletter to keep in the loop and also be informed of the best student deals handpicked by us every week!

Leave a comment



Leave a comment without Facebook