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Graduates urged to forget banking loyalty

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Fair Investment is urging graduates to switch to the best current account available rather than just automatically staying with their existing bank.

More than 230,000 students graduated this summer, and most of them will have accumulated some kind of student debt while at university. While graduates will hardly be able to do much about their debt immediately while still looking for their first job, the least they can do is not let it grow any further.

Most graduates will have been on a student bank account with beneficial rates and terms such as an interest-free overdraft for the duration of their studies. However, after graduation the bank might withdraw these benefits and the new graduates may suddenly face soaring overdraft charges if they do not keep an eye on their spending and the balance of their current accounts – and consider switching to one of the deals available for new graduates.

Ed Kendall, spokesperson for Fair Investment, said: “Graduation is a big step ahead into a new phase of your life. It’s also a great opportunity to take a step in the right direction to get your finances organised.”

Many Britons hardly ever think about their current accounts, and even less about switching to another bank. According to the Office of Fair Trading just 6% of bank customers’ switched current accounts in the past twelve months.

However, the interest rates, benefits and extras offered differ considerably from provider to provider and customers could potentially save themselves hundreds of pounds looking for a better deal.

Kendall added: “The same applies to graduate bank accounts. Why would you want to stay with the bank you had your student account with if other providers offer you much better deals? Forget your loyalty to your bank – you will fare much better if you look for what is best for you right now.

“When you are in the process of finding your first job and don’t have any money to spare, it is important to keep your bank charges at a minimum. Therefore a high interest-free overdraft should be on top of the list, then the fees and charges you incur should you go over your agreed overdraft limit.”

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