Big savings for money savvy graduates

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Recent graduates might not always realise it but their custom is something banks value above almost everyone else's. However distressing the state of their student debt ravaged finances may appear to be they can take heart in the fact that at this early stage in their banking life the major high street banks will be clamouring to get them on board.

The reason is fairly obvious - banks often come to find young people who set up an account stay loyal for a good number of years. Banks can typically rely on the fact that their customers, whether through laziness or apathy, are generally not likely to bother looking for an alternative. It's an odd form of brand loyalty that often means banks can get away with offering less than competitive financial products to established customers who will often buy into them without even bothering to look at the alternatives.

The good news is that with the potential of a lifetime of lucrative custom at stake, the major banks are generally prepared to attract young account-holders with student and graduate accounts that offer much better terms than a regular bank account.

Anyone who's just graduated should seize the moment and evaluate their options - don't fall into the trap of sticking with your current bank for convenience sake, the fact is there are loads of decent graduate accounts out there so you may as well play the field. What you should be looking for ahead of everything else is an account with a high interest-free overdraft.

The best deals available at the time of writing were offering a £2000 interest free overdraft in the first year (The RBS graduate current account and the Natwest graduate current account both offer £2000 interest free for the first year although the RBS account offers the better long term deal with year two and three at £1500 and £1000 respectively compared to £1000 and £500). By opting for a competitive graduate account that ensures a good interest free overdraft for the duration of the full three years (some accounts offer an one year 0% overdraft only, HSBC offers none at all) you'll potentially be saving hundreds of pounds whilst giving yourself an invaluable buffer and opportunity to pay off debts.

The one thing to remember however is not to fall into the trap of persisting with the same bank after your graduate account expires. It really is worth the small effort of consistently reassessing your situation, comparing your deal with other offerings on the market (There are multiple comparison sites out there, Motley Fool for instance have comparison tables for everything from current accounts to credit cards) and not being afraid to change. Those who don’t bother to do anything about an under performing bank account are as good as throwing their hard won money away.

 


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