Big banks love enticing new students with offers of glitzy freebies and 0% overdrafts, then rely upon their profitable custom for decades after graduation.

Yet act smart, and students - both this year's freshers and seasoned academics - can switch to the best and gain £100s.

What is a student account?

Put simply, it's a day-to-day current account specifically for students in higher education, with advantageous rates and functions. The only question is, What Counts As A Student?. This varies from bank to bank.

When to open an account?

As soon as possible! It used to be necessary to wait until you were settled into student digs, knee-deep in Pot Noodles, but now most banks accept anyone with a UCAS offer letter (conditional or unconditional). So, you can open an account before the start of term and bag an extra month or so's worth of preferential terms.

Beware, Freshers' Fairs!

Students' Unions, normally fierce protectors of students' rights, sometimes sell exclusive access to their new students' fairs to the highest bidding bank to bolster the Union's funds. As a former Students' Union President, I remember the negotiations myself!

Sadly, it's far from certain that the one on offer will be the top account on the market; generally it'll be the one who pays the uni the most money.

Picking the top student account

Almost every bank offers online access and free cash machine withdrawals, so which branch is nearest has little relevance for most able-bodied students. Therefore, to compare, you should purely examine what's on offer.

Go for the biggest overdraft!

Banks try to bribe students with freebies to entice you to open an account with them; but these sweeteners should only be a secondary consideration. For more...

Go for the bank that'll give you the biggest and longest 0% overdraft

Many students need an overdraft, so it's important it's free. Never go beyond your 0% overdraft or it's hugely costly. If desperate, get the bank's permission to extend your limit or you'll get nightmare bank charges.

The solution is to go for the lowest interest rate available, as the lower the rate is, the less the debt costs you (read a full Interest Rates Beginners' Guide).

The big draw of student accounts is that they let you borrow interest free, PROVIDED you stay within the limits. This is as good as it gets; a much bigger gift than any freebie. Therefore the question that pays is, 'which bank gives the most 0% borrowing, for the longest period?' (find out in the Best Buys).

Before you grab one though, there are a couple of stark warnings about overdrafts...

• Don't go over 0% overdraft limit

  Banks can agree to give you bigger overdraft limits, however if you use it the interest skyrockets to rates similar to those on credit cards, so always avoid if you can.

• Watch out for bank charges

  If you go over your agreed overdraft limit you'll be hit with huge bank charges of up to £35 a time, a few of these could completely wipe out your budget for the term. If you're having trouble always talk to the bank first; getting it wrong can leave you with credit rating problems lasting years.

• NEVER borrow more than you need

  Just because you're not paying interest doesn't mean you won't need to repay the debt - you will! Never borrow unnecessarily; remember once you graduate you'll pay for these debts, so budget as best as you can and never spend more than is absolutely necessary.

  Borrowing is dangerous; please educate yourself about how it works before doing it in any form. There's more info in the Student Finance and Interest Rates guides.

• How to budget

  Never count your 0% overdraft limit as part of your income. No-one ever tells you how to calculate your income when you're a student, so add up student loan + grants + employment earnings + money from family. Then make sure you don't spend more than that figure.

• Some overdraft rates are 'up to' not guaranteed

  The big high street banks shout about their large 0% overdraft offers, but unfortunately when you dig deeper some state that the rates you get are 'up to' the maximum limit.

• You will be credit scored

  When you apply for any debt product, including a bank account with an overdraft, the lender will credit score you. This is to decide how desirable a customer you are based on behavioural predictions from all your prior financial data.

  Yet as a student, it's likely there will be very limited data on you, which makes credit scoring very difficult. Sadly this can leave some students rejected due to ridiculous anomalies, and there may be no rhyme, reason or solution to this. For more info read the Credit Scoring guide.

Should I ignore the freebies?

The value of gimmicks, freebies and even cash bribes often pale compared to huge interest-free overdrafts, but when a number of different accounts offer similar overdraft levels, then freebies are great deal-breakers.

Always remember why freebies are offered though.

Banks know most customers never switch, so they hope a £50 freebie buys your business for life

It's for this reason that while the big high street banks are usually the least competitive providers, in the student market they're all fighting it out with super hot products. They know that if they get you now, they can make serious bucks out of you for a long, long time.

However, savvy students can take advantage. Choose the right student account and max out your gain from it, but don't let their short term bribe and free overdraft buy you for life. Grab what's on offer, then after uni, ditch and switch to the Top Graduate Account and eventually the Top Bank Account.

Freebie grabbing often prompts the question, 'can I open more than one student account?'. It used to be fine, but banks' criteria are now tighter, usually requiring you to deposit your student loan or main income in there. So, multiple-freebie grabbing is now much more difficult.

What about students who don't need to borrow?

That rare student breed - those likely to be in credit - could PROFIT (provided they're financially disciplined) by opting for the account with the biggest 0% overdraft, then using a budgeting technique we call 'deficit banking'.

The premise is to keep as big a negative balance within your 0% limit as possible, then put this money into the top paying Instant Access Savings Account (and interest earned will be tax-free for most students). When your overdraft limit drops, move the necessary cash back to your current account (use the Tart Alert to remind you).

This means interest is earned on money the bank lends you for free, done right, this can add around £200 to a student's coffers over the length of a course, and similar tricks are possible with student loans (see the Student Funding article).

However, this isn't an excuse for spending or borrowing more. If you're not financially disciplined, DON'T TRY IT.

Top Student Accounts 2010-11

For years, this has been a red hot head-to-head battle between the high street banks; yet they often compete by publishing bigger overdraft limits, then sneakily not allowing all students to have them. This means comparing overdraft sizes is only half the battle.

High street Student account details

Nine high-street banks offer student accounts, each with varying overdraft limits, incentives and term & conditions.

It's also worth remembering that next year even better accounts are possible so it's worth checking whether you should switch. All next year's top deals will be in the free weekly email.

While these 0% overdrafts are very useful, and should help you with cash-flow issues while you're a student, don't ever think of this money as part of your income, and there's a simple reason for this.

A year or so after you graduate, your 0% overdraft jumps to expensive high street rates

So, once this happens, it's crucial you switch away from your student account. Most big banks also offer Graduate Accounts, which give 0% overdrafts of decreasing sizes for a few years following graduation, and switching is simple.

Existing students should switch too!

Some of the current 0% overdraft deals are better than others, thus if you're a current student going into your second or third year, you may want to take advantage (though do confirm it'll at least match your current limit initially).

Existing students can usually transfer their accounts over and get the same terms as others in their year of study, although unfortunatley those switching won't be eligible for RBS's travel package incentives.

It's worth going in and having a chat. Even existing student account holders who don't have the maximum limits can try applying to increase their overdraft amount if they haven't already, provided they go into a branch with proof of intended funding (i.e. student loan documents).