Graduate Accounts

Cut the cost of post-uni banking

Graduate Accounts

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

The five BIG need-to-knows

  • 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.

  • 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 2017 or 2018, you may still be able to gain by switching to a graduate account now.

  • 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.

  • Budgeting isn't a rule just for students, it's a rule for life. The game changes if you go beyond your overdraft limit – you can end up 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 hefty interest between 9.9% EAR and 19.9% EAR. It's always far better to plan and budget to avoid this.

    If you go over your limit 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!).

  • 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 Best Bank Accounts guide for more.

Best buys: Top graduate 0% overdrafts 2019/20

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).

Up to £3,000 0% overdraft in first year, plus £3+/mth rewards

The Barclays Higher Education Account is a decent option thanks to its generous fee-free overdraft of up to £3,000 in year one (the limit you'll get is dependent on your credit record). There's a lower max 0% limit in subsequent years – up to £2,000 in year two and up to £1,000 in year three. The lowering limit provides a clear goal to help you clear the debt quicker but is also risky were you to miss that goal.

If you sign up to its Blue Rewards scheme, for a £4 monthly fee, you'll get at least £7/month back – so £3/mth after the fee – 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 (see FAQs).

How Barclays rates on service

51%                33%                16%
GREAT          OKAY              POOR
MAR 2019. VOTERS: 289

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 0% 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 (max £32/mth)

  • You can get the account as long as you graduated within the last three years. Barclays will ask you for your graduation date when you apply.

    After three years, you'll be transferred to a standard Barclays account.

  • You need to apply in branch, bringing your degree certificate and two pieces of ID/proof of address (see full list).

  • No, there's no in-credit interest paid with this account.

  • You'll also get up to an extra £14/mth if you've got certain Barclays products:

    • £5/mth if you've a Barclays mortgage.
    • £3/mth if you've a combined Barclays home insurance policy (£1/mth if you've either building or contents).
    • £1/mth if you've a Barclays loan.
    • £1.50/mth if you've Barclays life insurance (or £5/mth if you have life insurance with critical illness cover).

    The cashback you get on each of these will be doubled for the first year if you switch (so up to £28/mth). However, don't use the cashback as a reason to take out any extra products with Barclays without checking if they're right for you.

Up to £2,010 0% overdraft in first year

TSB's Graduate Account offers fee-free overdraft limits of up to £2,010 in year one (the limit you'll get is dependent on your credit record). There's a lower max 0% limit in subsequent years – up to £1,510 in year two and up to £1,010 in year three. The lowering limit provides a clear goal to help you clear the debt quicker but is also risky were you to miss that goal.

How TSB rates on service

35% GREAT
32% OK
33% POOR
MAR 2019. VOTERS: 291

0% overdraft: 1st year after graduation: up to £2,010, 2nd year: up to £1,510, 3rd year: up to £1,010
Arranged overdraft cost (above limit): £6/mth usage fee plus 16.77% EAR
Unarranged overdraft fees: £6/mth usage fee. £10 buffer then £5/day for £10-£25; £10/day for more than £25. Plus 16.77% EAR. Max £80/mth total charges.
In-credit interest: None

Compare all graduate accounts

Graduate accounts are offered by ten high street banks – though some of them are only for those with a student account from that bank. We've basic info here about the overdrafts you could get, though no bank offers a guaranteed overdraft – whether you'll get one depends on your individual circumstances.

All graduate accounts compared

Bank account Max fee-free overdraft limits Monthly cost of arranged overdraft £100 over fee-free limit Can you switch to this account after graduation?
Bank of Scotland Graduate Account Up to £2,000 in year 1, up to £1,500 in year 2, and up to £1,000 in year 3. £0.16

No

Barclays Higher Education Account Up to £3,000 in year 1, up to £2,000 in year 2, and up to £1,000 in year 3. N/A in year 1. £15.50 if over £1,000 and £31 if over £2,000 in years 2 and 3.

Yes; must prove you graduated within the past three years

Halifax Student Current Account Up to £1,500 in the first year only. £0.16

No - you can keep your Student Account for one year after you graduate

HSBC Graduate Bank Account

Up to £1,500 in year 1 and up to £1,000 in year two.

£1.55

Yes; must prove you graduated within the past two years

Lloyds Bank Graduate Account Up to £2,000 in year 1, up to £1,500 in year 2, and up to £1,000 in year 3. £0.16

No

Nationwide FlexGraduate Up to £3,000 in year 1, up to £2,500 in year 2, and up to £1,750 in year 3. N/A No
NatWest Graduate Account Up to £2,000 in year 1 and up to £1,000 in year 2. £1.40 No
RBS Graduate Account Up to £2,000 in year 1 and up to £1,000 in year 2. £0.81

No

Santander 123 Graduate Account Up to £2,000 in years 1 and 2 N/A No
TSB Graduate Account

Up to £2,010 in year 1, up to £1,510 in year 2, and up to £1,010 in year 3

£7.46 (including £6/mth usage fee)

Yes; must prove you graduated within the past three years

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 have perks such as free cash or vouchers for switching, linked 5% regular savers, 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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