Graduate to a better account: top providers revealed

MSE research reveals the top account for university-leavers comes from Lloyds TSB as no other bank offers a higher interest-free graduate overdraft. It offers up to £2,000 (see the Top Graduate Accounts guide).

The exception is if your student account was with Halifax or Bank of Scotland (HBOS) and you already had an overdraft at £2,000 or above, as you'll be able to carry it over for a year.

With many of the 250,000 graduates likely to be saddled with debts over £20,000, it's vital to choose an account that allows you to move debts to it for free.

Alana Fitzpatrick, MoneySavingExpert.com money analyst, says: "After graduating most people stick with the same bank that provides their student account. Yet you could be missing out on a big interest-free overdraft boost. Ensure you check all options first."

Top accounts

• Lloyds TSB offers a £2,000 interest-free overdraft in year one following graduation, £1,500 in year two and £1,000 in year three (banks tend to tier limits in this way).

• Royal Bank of Scotland offers the same deal but, to get the full overdraft you'll need a good credit score, even if you qualify for the account. Lloyds TSB's conditions are less stringent as anyone who qualifies for the account will get the maximum overdraft.

• HBOS does not operate a formal graduate account but will allow student account holders to maintain their overdraft limit (up to £3,000) for a year.

What if I'm not a recent graduate?

You can switch to most graduate accounts even if you left university at any time within the last three years.

You'll usually get the interest-free overdraft limit corresponding to the time since graduation. So if you graduated in 2008, you'll now get the year two overdraft limit.

Even graduates without debts could grab an account, take the free money and stash it in the top Instant Access Savings account to make a £150-ish profit.