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Graduate Accounts

Cut the cost of post-uni banking

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Sally and Helen S | Edited by Johanna

Updated August 2017

If you  get a better graduate account deal I'll eat my hat!Don't stick with your student bank after uni – loyalty can cost! 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 and switch your account to save £100s in fees, and get free perks on top.

The five BIG need-to-knows

  • Overdrawn? Get the biggest 0% deal possible

    The ultimate goal is to get a 0% overdraft to cover your full overdraft debt for as long as possible.

    First check what your existing bank offers, then compare to the top deals for switchers below in our top 0% graduate overdrafts section, though be aware that you'll need to pass a credit check to get a new account.

    This isn't about borrowing more. The aim is that by not paying interest, more of your money goes towards clearing your actual debt – and do it ASAP as the 0% won't last forever.

  • 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 2015 or 2016, you may still be able to gain by switching to a graduate account now.

  • Use 0% interest to wean yourself OFF overdrafts

    You'll have to pay 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. Banks try and encourage this by reducing the maximum 0% overdraft each year – the idea being that by the time the 0% ends you'll have paid it off.

    For a £2,000 overdraft which reduces gradually over three years, repayments need to be at least £56 a month. In other words, at the end of each month, your total overdraft should be £56 less than the previous month. To help, use the Free Budget Planner and Money Makeover guides.

  • 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% EAR and 19.9% EAR, 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 £15 per transaction (so a shopping trip in five shops spending £30 on your debit card could mean £75 of charges!).

  • 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.

Best buys Top graduate 0% overdrafts 2017/18

To be a winner here, banks must offer the biggest 0% overdrafts for the longest period.

All limits are "up-to" amounts, so you're not guaranteed to get them – how much you get depends on your credit score.

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 check (see Credit Rating guide).

Santander

Up to £2,000 0% overdraft limit and what you get's set for two years

Santander

One of the largest 0% overdrafts for graduates comes with Santander's 123 Graduate Account. Unlike many other graduate accounts, your 0% overdraft limit won't drop after the first year – it stays the same for both years you can have the account. However, this does mean you need to be self-disciplined to ensure it's paid off by the time the 0% ends.

Need-to-knows
  • You're not guaranteed to get the full £2,000 – it's dependent on your credit record.
  • If you keep busting your limit, or manage your account badly, Santander can reduce your interest-free allowance.
  • Unarranged overdraft fees are huge at £5+ per day so avoid busting your limit.
  • For those who've paid off their student debt, this account also offers the the chance to get interest on your savings for sums over £100. Any amount over £300 and you'll get 3% interest up to £2,000.
  • After two years, the account will be transferred to a standard Santander account.
  • Santander shares its £85,000 UK savings safety guarantee with Cahoot, so any credit balances are protected up to this level.
  • As a 123 account holder you're also eligible for savings accounts and loans at preferential rates, eg, a linked 5% regular saver.

How Santander rates on service (in credit)

55% Great

38% okay

7% poor

Date: Feb 2017 Voters: 241

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

Up to £3,000 0% overdraft in first year, but less in subsequent years

Barclays

Another decent option is the Barclays Higher Education Account. On the surface this may seem more attractive than Santander above given the possible £3,000 0% overdraft limit.

But like many other graduate accounts the maximum is only in year one, and you get less in subsequent years – up to £2,000 in year two and £1,000 in year three. Santander gives a constant limit for two years. Of course, Barclays' lowering limit provides a clear goal to help you clear the debt quicker but is also risky were you to miss that goal.

Also, if you sign up to its Blue Rewards scheme, for a £3 monthly fee, you'll get at least £7/month back – as long as you pay in £800+ and pay out at least two direct debits each month. You can get even more if you hold selected Barclays products.

Need-to-knows
  • You're not guaranteed to get the maximum £3k overdraft – it depends on your credit record.
  • There's no in-credit interest, so you won't be rewarded if/when you get out of your overdraft.
  • After three years, you'll be transferred to a standard Barclays account.
  • Barclays shares its £85,000 UK savings safety guarantee with Woolwich, which it owns, so credit balances are protected up to this level.

How Barclays rates on service

41% Great

40% okay

19% poor

Date: Feb 2017 Voters: 414

Stats box
  • 0% overdraft: 1st year after graduation, up to £3,000; 2nd year, up to £2,000; 3rd year, up to £1,000
  • Arranged overdraft cost (above limit): No fee up to £1,000; 50p/day between £1,000 and £2,000; £1/day for amounts over £2,000, max £3,000
  • Unarranged overdraft fees: No unauthorised overdraft available, but £8 per day as a service fee for unpaid items
  • In-credit interest: None

Compare all graduate accounts

Are you likely to be using your 0% overdraft to pay off uni debts, or taking advantage of 3% in-credit interest rates? Graduate accounts are offered by 10 high street banks – compare each one to find the right account for you.

Compare graduate accounts Check up to two at a time to compare below

To compare more accounts, deselect one or more of the selected banks above

Barclays

Co-operative

Santander

Halifax

HSBC

Lloyds Bank

NatWest

Nationwide

RBS

Smile

TSB

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 and within the last three 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. Not available for new customers. Will be moved to it if you've a Lloyds student account and you graduate. 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. Not available for new customers. Will be moved to it if you've a Nationwide FlexStudent account and you graduate. 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 (min £300) 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 £3,000. £2,000. Up to £2,000. Up to £3,000. Up to £1,500. Up to £2,000. Up to £2,000. Up to £2,500 £2,000. £2,000. Up to £2,000.
Year 2
Up to £2,000. N/A. Up to £2,000. N/A Up to £1,000. Up to £1,500. Up to £1,000. Up to £1,750 £1,000. N/A. Up to £1,500.
Year 3
Up to £1,000. N/A. N/A N/A. N/A. Up to £1,000. N/A - no 0% overdraft available Up to £1,000 N/A - no 0% overdraft available 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. 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. 1p/day per £7 borrowed 19.9% EAR.
First overdraft request in any 6 month period is free.
Subsequent requests cost £25.

1p/day per £7 borrowed

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

16.77% 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. None (typically only able to go into one "by £10s for a couple of days") 19.9%
First overdraft request in any 6 month period: free
Subsequent requests: £25.

None (typically only able to go into one "by £10s for a couple of days")

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

None - but won't be able to use the account until you go back into your agreed overdraft limit. £6/day for unarranged overdrafts greater than £6. Maximum charge is £90 per charge period (month-long period between each statement). 18.9% EAR.

16.77% 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%. 1% on up to £1,000 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. No, you must have held its student account. Yes, new customers accepted. Existing student account holders will be transferred. No, you must have held its student account. 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. Reward Current Account. HSBC Bank Account. Classic Current Account. Select Account. FlexDirect. Select Account. Smile Current Account. Classic Current Account.
Can you get a graduate loan?
No. No. Yes, access to preferential '123' rates. Must have a 123 Graduate Current Account. No. Yes, you can borrow up to £25,000 at 3.3% APR (on loans of £5,000 to £25,000) 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. 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. No. Yes. No.
Apply Apply Apply Apply Apply Apply Apply Apply Apply Apply Apply

Top in-credit current accounts

If you don't need an overdraft after graduating, then don't go for a graduate account. These standard bank accounts pay up to £125 to switch, and the top deals also have more perks such as linked 5% regular savers, additional vouchers and monthly cash rewards.

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).

For the full range of our top pick accounts, see the Best Bank Accounts guide.

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