Banks and building societies are gearing up for the start of a new term in the university year by launching a host of new student bank accounts and other fresher financial services.
While gimmicks and free inflatable chairs offer attractive incentives to freshers, moneysupermarket.com is warning soon-to-be students to look at the small print and go for the student bank accounts
which offer more valuable benefits such as the level of interest-free overdraft.
"For those off to university or college, getting your finances in order is crucial." said Kevin Mountford, head of current accounts
at moneysupermarket.com, reminding students to compare student bank accounts and not just stick with the bank they've always been with.
Moneysupermarket.com's research found that more than a quarter of people stay with the same bank throughout their working life, so banks are keen to lure loyal customers away with better offers. Switching to a better deal is encouraged, providing students do not get caught out by useless gadgets and short-lived special offers.
"The industry uses teasers to draw in students, however these can often detract from the core features. In a lot of cases, the overdraft element will prove to be far more relevant for students. In general, overdraft limits are increased year by year, although the latest Halifax/Bank of Scotland account can offer up to £3,000 from day one." said Mr Mountford. "Students need to remember the golden rule though – that overdrafts will need to be paid back at some stage."
"The likelihood is we will see many more products launching before the new term starts, but students should make sure they don't get seduced by headline rates and flashy giveaways."
This week saw Abbey announce the forthcoming launch its new student account, which offers a £50 incentive for opening the account and one of the highest interest rates for being in credit, and a stepped overdraft, designed to help students to manage their debts.
Steve Shore, director of Abbey Banking, commented: "Going to university is exciting but can be a difficult time when it comes to finances. Key to successful financial planning at university is making sure your money, when you have it, is working for you and also that your debts are not costing you too much."
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