You are entitled to a student bank account once you enter the college or university, which eventually changes to a graduate bank account after you’ve finished studying. Read on to find out more about these accounts.
Current accounts are a type of bank account that you use for everyday banking needs. These are some of the features of a current bank account:
- Cash card/debit card
- Overdraft facilities
- Mobile and internet banking
- Online and printed statements
- Interest on the money saved
- Direct debits and standing orders
Mainly, the difference between a current and student account is the overdraft feature. With some student accounts, up to £3,000 is allowed in overdrafts, interest-free. This means that while you are a student, you don’t have to pay any interest as long as the amount is within the authorised limit. Keep in mind though that you still have to pay it back after graduation.
Some banks and building societies may offer you freebies apart from the overdraft, which are designed to tempt you into opening one of their accounts. One good example of this is the 16-25 Railcard.
Your authorised limit upon opening an account might only be increased by agreement during your student years. Going beyond this limit can subject you to hefty charges. If you feel that this could happen, talk to your bank immediately, as this could hurt your credit rating.
How to Manage Your Budget through Your Student Account
Decide Whether to Open More than One Student Account
For some students, opening up multiple student accounts lets them take advantage of free overdraft facilities. It also helps them manage their budget accordingly by using a specific account for a different expenditure. While it may be a good option for some, doing this may also subject you to higher amount of debt in the future, so think very carefully before doing so.
Credit Cards for Students
Some banks may issue student credit cards as part of their student accounts to help students meet more expensive purchases that can be beneficial to their studies. Usually, these cards have lower and fixed credit limits. Still, you should not mistake them as extension of your wallet, as even a single missed repayment can leave you with high charges and damaged credit rating.
Sending Payments through Student Account
If you know the account details, you can perform phone and internet banking through your student account, allowing you to manage your payments more easily. One example of such service is Paym, which was launched in 2014. Paym allows transactions between users who have their mobile numbers registered. While it may be convenient, don’t forget to exercise extreme caution when using this service. Also, be sure to keep track of all your transactions to avoid going overboard your authorised limit.
Below are some tips to help keep all of your accounts safe:
- Never share your PIN with anyone, or store it anywhere where anyone can have access to it.
- Cover your hand while entering your PIN at cash machines.
- Keep your security software on your phones and tablets up to date if you are banking online.
- Make sure the device you use for online banking is used by you alone.
- Keep track with your bank statement to ensure that there are no unauthorised use and that there are no errors.
After leaving college, your bank will usually switch you to a graduate account from a student account. One good reason for this is to reduce the overdraft level you’ve acquired during your student days. Generally, graduate accounts offer interest-free overdrafts. However, this amount of interest-free money is reduced for every year that you have the account. Still, a graduate account might be a useful tool to revamp your budget right after graduation.