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Best graduate bank accounts 2018

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 accounts

From 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, though! 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 around 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 while studying, it's likely that your account will automatically transfer into a graduate account with the same branch.

But this isn't always guaranteed, and is your bank offering the best deal to graduates? Here are some factors to consider when doing your research:

  1. Don't be loyal to your bank

    should you be loyal to banks

    This might sound like bad advice, but when it comes to banks, loyalty rarely pays!

    Staying with the same bank for a long time generally doesn't come with any perks, as these are normally reserved for new customers who enjoy introductory rates as an incentive for switching.

    And thanks to the Current Account Switch Service, switching to the best graduate bank accounts has never been easier. All of your incomings and outgoings will be switched from one bank to another internally, meaning you don't have to handle any of that stuff (like updating direct debits) yourself.

    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. Switching current account shouldn't affect your credit rating, so there's no real reason not to do it! Follow our simple steps on how to switch bank accounts.

    Can you switch to a graduate bank account after graduating?

    Good question! Unfortunately, however, there's not just one answer. Some accounts can be switched to after graduation, but some can't (we clarify whether you can for each account in the table below).

    If possible, use a bit of foresight and research graduate accounts before you leave uni. That way you'll have a chance of switching to that bank before graduating, ensuring you get the account you want.

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

    graduate account 0% interest overdraft

    Credit: 20th Century Fox

    If 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.

    While the main aim of your student bank account was to allow you borrow in order to get through your uni years, the purpose of a graduate account is to give you a few years to pay off what you owe before it starts gaining interest (yep, adult life sucks).

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.
  1. In credit? Focus on perks!

    perks of being in credit

    If you find you tend to be good at budgeting and can stay out of the red, well done!

    In this particular case, we'd recommend finding an account with a decent interest rate on a positive balance, which will give you more bang for your buck (this could mean switching to a standard current account, not a graduate one).

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

  2. Check your credit rating before you apply

    check credit score when switching bank account

    Before 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 £3,000"), 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 large your 0% overdraft limit should be. If your credit rating isn't great, it's worth scoping out an account that offers a guaranteed overdraft amount that isn't based on your rating.

    Alternatively, try a few steps to improve your rating.

  3. Budget to clear your overdraft ASAP

    how to get out of your overdraft

    Credit: Number 10 - Flickr

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

    While it is possible to set up your graduate account a year after graduation, if you wait around you'll enter straight into the second year overdraft limit, which is often lower than the first year (as these accounts are calculated from your graduation date).

    Graduate account overdrafts decrease on a sliding scale for each year after you graduate, and depending on your account, you could see yours drop by up to £1,000 each year!

  4. Never go over your overdraft limit

    don't go into overdraft

    Credit: 20th Century Fox

    If 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 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).

  5. Beware of the graduate loan

    loans not saving money

    Credit: ABC

    It's likely you'll be offered a bank loan as part of your grad package - but think very carefully before grabbing the cash. Some banks are even offering up to £25,000 to graduates, which is a lot of cash (and therefore 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 remember to always read the small print for yourself.

Also note that some banks, such as Santander and Co-op, have recently removed their graduate accounts from their product ranges. Our table only includes graduate accounts that are available to open (either to continuing customers or those switching) as of July 2018.

You might not necessarily get the full overdraft allowance that's advertised in the following graduate bank account comparison table, 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.

Graduate bank accounts 2018

Bank account0% overdraftUnarranged overdraft feesCan switch after graduating?Review
Nationwide
Nationwide FlexGraduate
Up to
£3,000
None No More
Barclays
Barclays Higher Education Account
Up to
£3,000
£5 a day Yes More
TSB
TSB Graduate Bank Account
Up to
£2,010
£5 a day Yes
More
Lloyds
Lloyds Graduate Account
Up to
£2,000
None No More
Santander
Santander 123 Graduate Account
Up to
£2,000
£5 a day No More
NatWest
NatWest Graduate Account
Up to
£2,000
£8 a day Yes More
RBS
RBS Graduate Account
Up to
£2,000
£8 a day Yes More
HSBC
HSBC Graduate Bank Account
Up to
£1,500
£5 a day Yes More
Halifax
Halifax Student Current Account
Up to
£1,500
None No More

Graduate bank account reviews

Nationwide FlexGraduatenationwide

Interest and fee-free overdraft

  • Year 1: up to £3,000
  • Year 2: up to £2,500
  • Year 3: up to £1,750

The information on Nationwide’s own website regarding the size of the interest and fee-free overdraft is a bit confusing. Instead of describing it in terms of the maximum available each year, they say what the overdraft amount will reduce to at the end of each year after you graduate.

The accompanying graph just adds to the confusion, and it’s easy to be tricked into thinking that you’ll only be able to apply for £2,500 in your first year after leaving uni, £1,750 in your second year and £1,000 in your third year.

However, despite their confusing guidance – and what you might read on other websites – we’ve had it confirmed by Nationwide themselves that the figures we quote are correct.

Finally, as with all the graduate accounts in this list, the maximum overdraft is by no means a guaranteed offer for all applicants. Whether or not you’ll get it depends on your credit score.

Unplanned overdraft fees

If you go over your planned overdraft with a Nationwide FlexGraduate account, you won’t incur any extra fees or interest.

However, you won’t be able to take any cash out or buy anything using your card until your balance is back within the agreed overdraft limit.

Our review

Although you can’t switch to a Nationwide FlexGraduate account after you’ve graduated, its massive interest and fee-free overdraft makes it our top pick.

And remember, if you haven’t yet graduated (and are still a student), you can still make the switch to Nationwide’s FlexStudent account and get transferred to the FlexGraduate account once you leave uni.

Visit Nationwide »

↑ Comparison table

 

Barclays Higher EducationBarclays

Interest and fee-free overdraft

  • Year 1: up to £3,000
  • Year 2: up to £2,000
  • Year 3: up to £1,000

Once again, whether or not you get the maximum overdraft each year will depend on your credit rating.

Unarranged overdraft fees

With a Barclays Higher Education account, if you go over your planned overdraft limit you’ll enter ‘Emergency Borrowing’. This is essentially an unplanned overdraft by another name, and the amount available depends on the size of your planned overdraft.

You’ll incur a £5 charge for each day that you use Emergency Borrowing, up to a maximum of seven days per monthly statement period. After that, you’ll be charged the appropriate daily overdraft fee.

Our review

The maximum overdrafts available with a Barclays Higher Education account aren’t quite as high in years two and three as you’d get with a Nationwide FlexGraduate account, but they’re still comfortably bigger than most of the competition.

What’s more, you can still switch to this account after graduation – as long as you can prove to Barclays that you graduated within the past three years.

Barclays Higher Education is also one of the few graduate accounts to come with an incentive: cashback offers at over 150 retailers, including the likes of Boots and JustEat.

Visit Barclays »

↑ Comparison table

 

TSB Graduate AccountTSB

Interest and fee-free overdraft

  • Year 1: up to £2,010
  • Year 2: up to £1,510
  • Year 3: up to £1,010

As ever, your credit score will play a role in determining whether or not you get the full interest and fee-free overdraft each year.

Unarranged overdraft fees

The penalty fees for exceeding your planned overdraft with this account are a little more complex than with most other graduate accounts. Here’s a quick breakdown of the unarranged overdraft fees for a TSB Graduate Account:

  • Under £10: no fee
  • £10 – £25: £5 daily fee*
  • £25 or more: £10 daily fee*

*Daily fees will be charged a maximum of eight times per monthly statement period.

Our review

In an industry where most banks are offering graduate accounts with overdrafts of £2,000, £1,500 or £1,000, you kind of get the impression that the overdraft limits on TSB’s Graduate Account are designed purely to place higher on rankings such as this. Well, it’s worked.

The unplanned overdraft fees are among the harshest for graduate accounts, but the extra £10 of planned overdraft available compared to most competitors (plus the £10 buffer before you get charged a penalty fee) should hopefully mean that you’re able to avoid being caught out.

Visit TSB »

↑ Comparison table

 

Lloyds Graduate Accountlloyds

Interest and fee-free overdraft

  • Year 1: up to £2,000
  • Year 2: up to £1,500
  • Year 3: up to £1,000

Your credit score will play a role in determining whether or not you receive the full interest and fee-free overdraft in each year.

Unarranged overdraft fees

There are no unarranged overdraft fees with a Lloyds Graduate Account. However, if you reach the limit of your planned overdraft you’ll be unable to withdraw any funds (either taking cash out or paying by card) until your balance returns to within your planned amount.

This means that any payments you try to make while you’re in your unplanned overdraft will likely bounce.

Our review

You can’t switch to a Lloyds Graduate Account once you’ve already graduated, but as long as you’re still a student, you can still switch to the student account which then becomes a graduate account when you leave uni.

The maximum interest and fee-free overdrafts available are about par for the course, and there are no incentives attached to the account, but if you’re after a no-frills graduate account that does what it says on the tin, the Lloyds Graduate Account is as good a choice as any.

Visit Lloyds »

↑ Comparison table

 

Santander 123 Graduate Accountsantander

Interest and fee-free overdraft

  • Year 1: up to £2,000
  • Year 2: up to £2,000
  • Year 3: up to £2,000 (overdraft only available in year 3 if account was opened before 26th June 2017)

Your credit score will play a role in determining whether or not you receive the full interest and fee-free overdraft in each year.

Unarranged overdraft fees

Entering your unplanned overdraft with a Santander 123 Graduate Account will result in a charge of £5 per day, up to a maximum of 10 days per monthly billing period.

Our review

The Santander 123 Graduate Account is only available for students currently on the 123 Student Account, meaning you can’t switch after graduation. However, the account does come with a little bonus that no other graduate account does: in-credit interest.

The breakdown of interest on the Santander 123 Graduate Account is as follows:

  • 1% when your balance is between £100-199
  • 2% when your balance is between £200-299
  • 3% when your balance is from £300-2,000

At the other end of the scale, the interest- and fee-free overdraft is also about standard. However, unless you opened your account before 26th June 2017, you’ll only get these benefits for two years.

Visit Santander »

↑ Comparison table

 

Natwest Graduate AccountNatWest

Interest and fee-free overdraft

  • Year 1: up to £2,000
  • Year 2: up to £1,000

As always, whether or not you receive the maximum interest and fee-free overdraft will depend on your credit score.

Unarranged overdraft fees

Exceeding your planned overdraft by over £10 with a Natwest Graduate Account will lead to a charge of £8 per day, up to a maximum of nine days per charging period. If you exceed your planned overdraft by less than £10, there are no fees.

Our review

The interest and fee-free overdraft attached to the Natwest Graduate Account only lasts for two years – not awful, but clearly not as good as the three year overdrafts you can get elsewhere.

That said, you can at least switch to this account after graduating – and if you do, there’s a reward waiting for you: a Tastecard that’ll get you a discount at thousands of restaurants across the UK!

Visit Natwest »

↑ Comparison table

 

RBS Graduate AccountRBS

Interest and fee-free overdraft

  • Year 1: up to £2,000
  • Year 2: up to £1,000

Whether or not you’re entitled to the full interest and fee-free overdraft will depend on your credit rating.

Unarranged overdraft fees

If you enter your unplanned RBS Graduate Account overdraft by more than £10, you’ll be charged a daily fee of £10 up to a maximum of nine days per charging period. If you exceed your arranged overdraft by less than £10, you won’t be charged a fee.

Our review

If you’re looking at the RBS Graduate Account and thinking it looks awfully familiar, you’re right to feel that way – it’s pretty much exactly the same as the Natwest Graduate Account (they’re part of the same banking group, so it makes sense).

As is the case with the Natwest equivalent, you can switch to the RBS Graduate Account even after you’ve left uni – and if you do, you’ll be rewarded with a Tastecard.

So if you like the look of what the Natwest and RBS accounts are offering, and don’t know which to go for, we’d advise choosing whichever bank has more branches close to where you live and work – it’s pretty much the only difference between the two!

Visit RBS »

↑ Comparison table

 

HSBC Graduate Bank AccountHSBC

Interest and fee-free overdraft

  • Year 1: up to £1,500
  • Year 2: up to £1,000

Once again, your eligibility for the full interest and fee-free overdraft will depend on your credit score.

Unarranged overdraft fees

Entering your unplanned overdraft with a HSBC Graduate Bank Account will land you with a £5 fine for each day (up to a monthly maximum of nine days) you’re beyond your arranged amount.

Our review

The HSBC Graduate Bank Account is another no-frills offering, with a relatively small overdraft available for just two years after graduation.

Visit HSBC »

↑ Comparison table

 

Halifax Student Current AccountHalifax

Interest and fee-free overdraft

  • Year 1: up to £1,500

Whether or not you receive the full interest and fee-free overdraft will depend on how good your credit score is.

Unarranged overdraft fees

The Halifax Student Current Account doesn’t come with the option of an unarranged overdraft, meaning there are also no fees for exceeding your planned overdraft amount. As you can’t exceed your planned overdraft, your payments may bounce instead.

Our review

The Halifax Student Current Account is a bit of an odd one, to be honest. As the name suggests, it’s not really a graduate account at all – instead, you just get to keep your student account for a year.

That means you get just one graduate year of your interest and fee-free overdraft, which is by far the worst deal out there. That said, you do get 0.1% interest on all in-credit balances – not a huge amount, but more than what the rest of the graduate accounts offer (none at all).

Visit Halifax »

↑ Comparison table


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!

Got any questions about graduate accounts? Leave a comment on this article and we’ll help you out!

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