A-Level passers 'need to focus on student account overdrafts'
Thursday, 18 August 2011 01:05
A-Level students who have got the grades they need to go to university must focus on the overdraft facilities offered by banks when choosing which student account to go for.
According to independent financial research company Defaqto, there is "significant" variation in the overdraft facility offered to university-goers.
This is especially important at the moment, the company stated, as the rising cost of tertiary education means most students are likely to become overdrawn at some point.
The company's research showed some accounts offer access to an interest-free overdraft of up to £3,000 a year, while others increase the facility over time and some do not offer an interest-free facility at all.
David Black, insight analyst for banking at Defaqto, said: "Doing the homework up front and getting the right account in place could pay significant dividends. Student accounts typically offer a number of incentives and, although useful, it is essential that students look beyond these and focus on what would happen if they were to become overdrawn."
He added that students must remember they will eventually have to repay any money they borrow, making it essential to be disciplined when using an overdraft.
Moneysupermarket.com's head of banking Kevin Mountford made a similar suggestion earlier this week, advising students to look beyond the freebies and think carefully about the terms behind student bank accounts.
Use the Myfinances.co.uk comparison tables to find the best deal on a student bank account
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