As a new batch of students receives their exam grades and prepares to set off for university, the banks are gearing up for the new intake with a range of free gifts and incentive as part of their bank account provision.
Many major lenders such as HSBC have successfully used incentives – in this case a five-year railcard worth up to £100.
However, while young people who are unused to managing their own finances may be lured by temptations such as free MP3 players and student railcards, financial website Moneyfacts.co.uk is advising students to think carefully about which account to choose.
Students should look at the fundamental qualities of the account behind the initial incentives, including loan rates and overdraft rates - to make an informed decision about the account that best suits their needs.
Samantha Owens, research editor at Moneyfacts.co.uk, commented: "Some institutions are offering attractive free gifts, but with the number of accounts on offer, it is crucial that students also take into consideration crucial account features such as overdraft rates and limits."
According to Ms Owens, the savings offered by such features as overdraft limits and rates could potentially cancel out the cost of freebies such as MP3 players.To read more about bank accounts, click here.
© Adfero Ltd