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Best graduate bank accounts 2021

Get to grips with graduate banking and you'll be better off for up to three years after uni. Avoid the fees and switch to a better deal – here's how!

bank account logos with graduates

From 0% overdrafts to freebie incentives, student bank accounts offer some pretty great deals.

Graduation doesn't have to mean the missing out on all the bank account perks, though! We'll show you how to make the most of student banking benefits by getting an account that's 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 – and switching couldn't be easier.

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 below.

7 tips for choosing a graduate bank account

Here's how to find the ideal graduate bank account for you:

  1. Switch bank accounts

    dog and owner

    When it comes to banks, loyalty rarely pays off.

    Staying with the same bank for a long time generally doesn't come with any extra 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 account 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 reason not to do it! Just 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 a clear yes or no answer for whether you can switch to a different graduate account. 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 better chance of switching to a different account with more perks.

  2. Choose a longer-term 0% interest overdraft

    piggy bank

    If you've graduated in the red, sourcing the graduate account offering the longest 0% overdraft should be your main aim – but do what you can to avoid taking on more debt than you already have.

    While the main aim of your student bank account was to allow you to 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.

    As such, try to choose the graduate bank account with the longest 0% overdraft available, as this will give you more time to pay it all back.

    Bear in mind that it is possible to apply for a total overdraft that exceeds the 0% allowance, but you will have to pay interest and fees on the portion over that allowance.

    As graduate accounts are meant to be a free way to get out of your overdraft, we would strongly recommend you stay within your interest- and fee-free limits (and go for an account with the most generous offering, if that's what you're after).

    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. Choose a bank account that pays interest

    pound coins

    Credit: Ink Drop – Shutterstock

    If you find you tend to be good at budgeting and can stay out of the red, you can really benefit from accounts that pay interest.

    In this particular case, we'd recommend finding an account with a decent interest rate on a positive balance as this will essentially be a way to earn free money (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).

  4. Check your credit rating before you apply

    credit score graph

    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 score 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.

  5. Budget to quickly clear your overdraft

    george osborne

    Credit: Number 10 - Flickr

    Don't use the interest-free overdraft as an opportunity to spend more money – your graduate account is your 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!

  6. Don't go over your overdraft limit

    new girl stop

    Credit: 20th Century Fox

    If you go over your 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).

  7. Graduate loans are different from Student Finance

    piggy bank with graduate cap

    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 even offer 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 Maintenance Loans – 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.

In the table below, we go through some of the best graduate bank accounts – but remember to always read the small print for yourself.

Best graduate 0% overdraft accounts

Graduate bank accounts 2020

Bank account0% overdraftUnarranged overdraft interestSwitch as graduate?Review
Barclays Higher Education Account
Up to
N/A Yes More
Nationwide FlexGraduate
Up to
N/A No More
TSB Graduate Bank Account
Up to
39.9% EAR (max £30/mth) Yes
Lloyds Graduate Account
Up to
N/A No More
Santander 123 Graduate Account
Up to
N/A No More
NatWest Graduate Account
Up to
39.49% EAR (max £17.25/mth) No More
RBS Graduate Account
Up to
£8 per day (max £80/mth) No More
HSBC Graduate Bank Account
Up to
39.9% (max £20/mth) Yes More
Halifax Student Current Account
Up to
N/A No More

Note that some banks, such as 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 2020.

You might not necessarily get the full overdraft allowance that’s advertised, 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 above) and will be counted from the year you graduate, not from when you open the account.

Graduate bank account reviews

Barclays Higher EducationBarclays

Interest- and fee-free overdraft

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

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

Unarranged overdraft fees

Barclays doesn’t offer an unarranged overdraft with its Higher Education account. Should you attempt to make a payment that will take you beyond your arranged overdraft, Barclays will usually refuse to release the money.

On the rare occasion that they’re unable to do this (Barclays gives the example of an offline payment on a flight) and you enter an unarranged overdraft, no additional charges will be applied.

Our review

Barclay’s massive interest- and fee-free overdraft makes it our top pick. 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, such as Boots and Expedia.

Visit Barclays »

↑ Comparison table


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.

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.

Unarranged overdraft fees

The FlexGraduate account, as with all Nationwide accounts, doesn’t offer an unarranged overdraft.

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, unlike with the Barclay’s graduate account, it’s still a very good bank account for grads as it comes with such a sizeable maximum overdraft.

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

Visit Nationwide »

↑ Comparison table


TSB Graduate AccountTSB

Interest- and fee-free overdraft

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

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

If you exceed your arranged overdraft limit with a TSB Graduate Account, the bank may agree to make the payment using an unarranged overdraft.

You’ll be charged interest on the unarranged overdraft balance at a rate of 39.9% EAR, up to a maximum monthly total fee of £30 (including any returned item fees).

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 fact that you can switch to this account after uni makes it a good choice for anyone looking for an overdraft around the £2,000 mark.

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 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 (be that 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.

A bonus of the account is that it allows you to get up to 15% cashback at some top retailers, like Sky and Co-op.

The maximum interest- and fee-free overdrafts available are about par for the course, but if you’re planning to regularly shop at any of the retailers included in their cashback offer, the Lloyds Graduate Account could be a good choice for you.

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

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

Unarranged overdrafts with a Santander 123 Graduate Account charge 0% interest, however, Santander may decide to refuse you an unarranged overdraft and simply reject the payment instead.

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.

They offer 1% AER interest on balances up to £2,000.

Plus, the 16–25 railcard that comes with the student account is available for a fourth year.

At the other end of the scale, the interest- and fee-free overdraft is also about average, in comparison to the other graduate accounts in our table.

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

If you have a Natwest Graduate Account, the bank may grant you an unarranged overdraft depending on your individual financial circumstances.

If they allow the payment to go through, you’ll be charged interest on the balance of your unarranged overdraft at a rate of 39.49% AER, up to a monthly maximum fee of £17.25.

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.

Although you can no longer switch to a Natwest Graduate Account after graduation, if you had a Natwest Student Account, your perks should extend too. So if you got a Tastecard with your account, this will automatically renew annually for another two years, getting 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

As with Natwest, if you have an RBS Graduate Account, the bank may or may not grant you an unarranged overdraft, depending on your personal financial circumstances.

Should they give you an unarranged overdraft and allow the payment in question to go through, you’ll be charged interest on the unarranged balance at a rate of £8 per day, up to a monthly maximum fee of £80.

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’t switch to an RBS Graduate Account after you’ve left uni. Fortunately, however, you’ll still get to carry over the perks (including your Tastecard) that you enjoyed with your Student Account.

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

HSBC may grant Graduate Bank Account holders an unarranged overdraft. Should they do so, you’ll be charged 39.9% EAR on the unarranged balance, up to a monthly maximum charge of £20.

Our review

The HSBC Graduate Bank Account is a 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 officially come with the option of an unarranged overdraft. But, as with Lloyds, should you make a payment that the bank is unable to reject at the time, you won’t be charged for entering your unarranged overdraft.

That said, you may be unable to withdraw money or make any payments with your account until you return the balance to within the arranged overdraft limit.

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 an extra 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% AER interest on all in-credit balances – not a huge amount, but more than most of the other graduate accounts offer (i.e. nothing).

Visit Halifax »

↑ Comparison table

Switching to a bank account that fits your needs will make surviving life post-uni that much easier. You’ve got this, now get out there and knock ’em dead!


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