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Graduate Accounts 2014/15 Cut the cost of post-uni banking

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If you  get a better graduate account deal I'll eat my hat!

Don't stick with your bank after uni - loyalty costs! Banks love fresh grads and offer exclusive deals, such as 0% overdrafts for up to three years. You'll get uni perks all over again, but this time, it could be better.

If you've graduated in the past three years, see if you can ditch & switch your account to save £100s in fees, and get free perks.

The five BIG facts

1.Overdrawn? Get the biggest 0% deal possible

If you're already overdrawn from your existing student account, look for the biggest and longest-lasting interest-free overdraft. But these accounts aren't about borrowing more.

The aim is that by not paying interest, more of your money can go towards clearing your actual debts. To find the right deal, see 0% graduate overdrafts.

2.Graduate accounts aren't just for new graduates

Stick with your current student account and you may find your 0% overdraft quickly diminishing in the first year after university. Some graduate accounts offer preferential terms for up to three years after graduation.

Therefore, even if you graduated in 2012 or 2013, you may still be able to gain by switching to a graduate account now.

3.Use 0% interest to wean yourself OFF overdrafts

You'll have to pay it off the overdraft at some point, usually after two or three years. Fail to do so and you'll be subject to astronomical charges and fees. The aim of the game is to gradually reduce the overdraft so that by the time you're being charged for it, you no longer have one.

For a £2,000 overdraft which reduces gradually over 3 years, repayments need to be at least £55 a month. In other words, at the end of each month, your total overdraft should be £55 less than the previous month. To help, use the Free Budget Planner and Money Makeover guides.

4.Likely to be in credit? Max out your interest

If you're one of the lucky ones who'll be in credit for your first few years of 'grown-up' banking, forget overdrafts - focus on accounts which pay top rates and more, including cashback, travel insurance, or a cash sum upon switching.

These tend to give useful perks, rather than standard graduate deals of an extended 0% overdraft. Therefore to get them you'll usually need a regular income of more than a set minimum. See the Top In-Credit accounts for the best.

5.Never go over your overdraft limit - BUDGET!

Budgeting isn't a rule just for students, it's a rule for life. The game changes if you go beyond your overdraft limit - charges shoot up and you can be caught in a vicious cycle that's tough to ever escape.

If you're struggling, talk to the bank at least. Try to agree an extension but remember, you are likely to be charged interest between 9.9% AER and 19.9% AER, which is huge. It's always far better to plan and budget to avoid this.

If not, or you go over without permission, the charges can be enormous - up to £25 per transaction (so a shopping trip in five shops spending £30 on your debit card could mean £125 of charges!). More info in Bank Charges Compared.

Top graduate 0% overdrafts 2014/15

To be a winner here, banks must offer the biggest 0% overdrafts for the longest period. This year, all limits are "up-to" amounts, meaning you're not guaranteed to get them. However, providing you've got no glaring issues on your credit file, the chances of getting the full amounts are decent.

All of the following accounts require you to pass a credit score (see Credit Rating guide).

Santander

SantanderUp to £2,000 overdraft limit for three years

  • Overdraft up to £2,000
  • Apply

Santander's 123 Graduate Account has a sizeable interest-free overdraft limit for the entire duration of the account - that's up to £2,000 for three years after graduation, though if you apply in your third year after graduating, you'll only get the account for a year.

The amount's not guaranteed, the overdraft limit you get is based on your credit record. Plus, you'll need to manage your account well, otherwise Santander can reduce your allowance.

Use this time to pay down debt or you'll be stung with overdraft charges once the three years of interest at 0% is over.

You won't be hit if you have an arranged overdraft over the 0% limit, but avoid going into an unauthorised overdraft - the fees are huge.

For those who've paid off their student debt, this account also offers the the chance to max your savings for sums over £100. Any amount over £200 and you'll get 3% of interest up to £2,000.

Account holders will also be eligible for a graduate loan at 8.9% APR, available up to three years after graduation.

  • In-credit interest:1% for £100+, 2% for £200+, and 3% from £300 to £2,000
  • Arranged overdraft cost: No fees
  • Unarranged overdraft fees: £5/day (max 10/mth), £5/£10 paid/unpaid fees per item
  • 0% overdraft: 1st year after graduation, £2,000; 2nd year, £2,000; 3rd year, £2,000.
Lloyds Bank

Lloyds BankUp to £2,000 overdraft in first year, tiered for three years

  • Overdraft up to £2,000
  • Apply

Another decent option is Lloyds Bank's Graduate Account. You'll get up to £2,000 overdraft in the first year, £1,500, and then £1,000 in the final year.

It's up to Lloyds how much overdraft you get. They will credit check you to decide what limit to give you. You're not guaranteed to get the full £2,000

There's a £10 buffer if you go over your limit but borrow more and any agreed lending is at 16.77% EAR plus a £6/mth fee. Go over this and fees are up to £10 a day - so avoid it at all costs.

There's no in-credit interest rate, but the account's the next best option. You'll also be eligible for a graduate loan, up to five years after graduation.

  • In-credit interest: 0% AER
  • Arranged overdraft cost: 16.77% EAR plus £6/mth.
  • Unarranged overdraft fees: 16.77% EAR £6/mth, £5/day for £10-£25, £10/day for £25+
  • 0% overdraft: 1st year after graduation, £2,000; 2nd year, £1,500; 3rd year, £1,000.

Are you likely to be using your 0% overdraft to pay off uni debts, or taking advantage of 3% in-credit interest rates? Ten high street banks offer graduate accounts - compare each one to find the right account for you.

Compare graduate accountsCheck up to three at a time to compare below

2014/15 Graduate Account Details
Eligibility criteria (must be over 18 to get an overdraft)
Existing student accounts will be upgraded. New customers must provide degree certificate from past two years and must be in permanent full-time employment or have a job offer.
Must be in full-time education, including under/post-graduates and mature students. Allowed to transfer any existing student account as long as you use it as your main account, with an initial deposit of £300.
Must have completed a degree, postgraduate degree or course lasting more than two years. Must be working or have confirmed job offer. Must use as main account, paying in salary each month.
Must be existing holder of student account at time of graduation.
Proof of university graduation within the last two years.
Graduated up to 3 years ago with UK degree. Must transfer account from other provider (if not already a customer).
Eligible for Natwest student account holders or permanent UK residents who have graduated within the last three years, studying on a course lasting more than two years.
Open to existing student account holders, and graduates from a full-time higher education course (lasting more than two years) within the past three years.
Not accepting applications at the moment. Must pay main form of funding into account, and must hold a Smile Student Account to be eligible for a year’s free overdraft after graduation.
Graduated up to 3 years ago with UK degree. Must transfer account from other provider (if not already a customer).
Maximum interest free overdraft limits
Year 1
Up to £1,500.
£2,000.
Up to £2,000.
Up to £3,000.
Up to £1,500.
Up to £2,000.
Up to £2,000.
£2,000.
£2,000.
£2,000.
Year 2
Up to £1,000.
N/A.
Up to £2,000.
N/A
Up to £1,000.
Up to £1,500.
Up to £1,000.
£1,000.
N/A.
Up to £1,500.
Year 3
N/A.
N/A.
Up to £2,000.
N/A.
N/A.
Up to £1,000.
Graduates before January 2013 will receive £500 interest-free overdraft, graduates after January 2013 will not have an overdraft facility.
Graduates before January 2013 will receive £500 interest-free overdraft, graduates after January 2013 will not have an overdraft facility.
N/A.
Up to £1,000
Are overdrafts guaranteed or on a case by case basis?
No, judged on a case-by-case basis.
No, judged on a case-by-case basis.
No, judged on a case-by-case basis.
No, judged on a case-by-case basis.
No, judged on a case-by-case basis.
No, judged on a case-by-case basis.
No, judged on a case-by-case basis.
No, judged on a case-by-case basis.
No, judged on a case-by-case basis.
No, judged on a case-by-case basis.
Agreed overdrafts beyond the 0% limit
50p/day between £1,000 and £2,000, £1/day for amounts over £2,000, max £3,000.
9.9% EAR.
N/A.
7.2% EAR.
19.9% EAR.
First overdraft request in any 6 month period is free.
Subsequent requests cost £25.

16.77% EAR plus £6/month usage fee.

N/A.
N/A.
9.9% EAR.

19.94% EAR plus £6/month usage fee.

Unauthorised overdraft rate & fees (always avoid - talk to bank first)
£8 per day as a service fee for unpaid items.
18.9% EAR.
£5 per day, max 10 days per month, plus paid/unpaid item fees of £5/£10.
24.2% EAR for sums over £3,000.
19.9%
First overdraft request in any 6 month period: free
Subsequent requests: £25.

16.77% EAR, plus £6/month overdraft usage fee and daily fees up to £10 (max of 8/month).

£6/day for unarranged overdrafts greater than £6. Max £90 per charge period (the month-long period between each bank statement).

£6/day for unarranged overdrafts greater than £6. Maximum charge is £90 per charge period (month-long period between each statement).
18.9% EAR.

19.94% EAR, plus £6/month overdraft usage fee and daily fees up to £10 (max of 8/month).

In-credit interest rate
0%.
0%.
1% for £100+, 2% for £200+, and 3% from £300 to £2,000.
0.1%.
0%.
0%.
0%.
0%.
0%.
0%.
Transfers accepted at graduation?
Yes.
No, you must have held its student account.
Applications for new graduate accounts are welcome, but transfers from an existing graduate account are not permitted.
No. Must be existing account holder.
Yes, new applications accepted. Existing student account customers will automatically be converted in July upon graduation.
Yes, if you've graduated from a UK university in the past three years.
Yes, new customers accepted. Existing student account holders will be transferred.
Yes, new customers accepted. Existing student account holders will be transferred.
No, you must have held its student account.
Yes, if you've graduated from a UK university in the past three years.
What account does it revert to afterwards?
Barclays Bank Account.
Current Account
Everyday Current Account.
Choice of current accounts.
HSBC Bank Account.
Classic Current Account .
Select Account.
Select Account.
Smile Current Account.
Classic Current Account.
Can you get a graduate loan?
No.
No.
Yes, 8.9% typical APR, available up to 3 years after graduation. Must have a 123 Graduate Current Account.
No.
Yes, you can borrow up to £25,000 at 5.9% APR up to five years after the date of graduation (subject to how you use your account).
Yes, rate depends on account history and your credit record. Available up to 5 years from graduation.
No.
No.
No.
Yes, you can borrow up to £10,000. Rate depends on your credit history. You must have the TSB Graduate Account.
Can you open a graduate account with another bank too?
No.
Yes.
No.
Yes.
Yes.
No.
No.
No.
Yes.
No.

Top in-credit current accounts 2014/15

If you have a job, earn around £14,000 and are likely to be consistently in credit, go for the account that pays the most interest. These aren't specific graduate accounts, they're the best standard bank accounts - but they often beat graduate deals if you don't have an overdraft. Scan through all the picks though, as they've different perks.

However, their overdrafts are often much smaller, or more expensive. Only do this if being overdrawn is a very unlikely scenario. To get any of the following you must have an adequate credit rating (see Credit Rating guide).

If you are likely to be substantially in credit, then its usually best to shift larger amounts of cash into Top Savings Accounts to maximise the interest.

First Direct

Free £100 plus top customer service* £250 free overdraft plus chance to get 6% linked savings account

  • Min monthly income: £1,000
  • Apply

If you earn over £13,300 once you graduate, new First Direct* customers switching to the 1st Account get a £100 bonus.

You need to pay in a salary of at least £1,000 a month to get the switching bonus, and to keep the account fee free (it's £10/mth if you don't - though you can avoid this, read the full info).

The 1st Account pays no in-credit interest, but scores very highly on customer service - 92% of its customers in our last poll rated it great. Owing to this, it offers £100 if you switch away within a year, if you've maintained the monthly £1,000 deposits.

  • In-credit interest: NONE
  • Arranged overdraft Cost: 0% up to £250, 15.9% EAR after that
  • Unarranged overdraft fees: £25 paid item fee or unpaid fee of £0, £10 or £25.
  • Min monthly pay-in: £1,000
  • Need to set up direct debit or standing order? No
Nationwide

FREE annual European travel insurance* get free european travel insurance if you pay in £750+/mth

  • Min monthly income: £750
  • Apply

If you're looking to head off on a few European jaunts and don't need an overdraft, Nationwide's* FlexAccount gives free European travel insurance to those who pay in £750+/mth. If you're going further afield, it's only £20/year to upgrade it to worldwide.

If you have a pre-existing condition, contact Nationwide as you may need a medical before getting cover at an additional cost. This account is also one of our top pick packaged accounts.

  • In-credit interest: NONE
  • Arranged overdraft Cost: 18.9% EAR
  • Unarranged overdraft fees: £15 paid/unpaid item fee, £20 usage fee (max £95/mth)
  • Min monthly pay-in: £750
  • Need to set up direct debit or standing order? No
Santander

Up to 3% interest & cashback on bills* pay £2/mth fee for cashback on bills- check if it's worth it

  • Min monthly income £500
  • Apply*

If you've bills that you pay by direct debit, and can pay in £500/mth salary, the Santander* 123 Account pays cashback up to 3% and beats the current Top Savings, paying interest on in-credit balances. You'll need to switch to get the deal - see below for full details.

Cashback rates: 1% on water, council tax and Santander mortgage repayments (up to £1,000), 2% on some gas and electricity bills, and 3% on mobile, home phone, broadband and TV packages.

It does have a £2/mth fee though, so only get it if the cashback gains beat the cost. For example, paying £100/mth for gas and electricity, and £40/mth for your mobile phone bill, you'll earn around £3. Check your bills and do a few calculations before signing up.

  • In-credit interest: 1% AER for balances over £1k, 2% over £2k, 3% for between £3k-£20k
  • Cashback: 1% on water, council tax & Santander mortgage, 2% on gas & elec, 3% on phone, internet & TV
  • Arranged overdraft cost: £1/day, capped at 20 days/month. 0% for 4mths after switching
  • Unarranged overdraft fees: £5/day
  • Need to set up direct debit or standing order? Yes, minimum two direct debits

For further options, if you don't need such a huge overdraft, see the Best Bank Accounts guide.

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