When it comes to choosing their bank account, students should not get fooled by providers offering a range of tempting incentives to lure them in and instead concentrate on what really matters - interest rates and interest-free overdrafts, says moneysupermarket.com.
"For all students who are about to head to university, now is the time to look at the best bank accounts available,” said Clare Francis, site editor at
moneysupermarket.com.
"When considering what bank account to opt for, students should look at interest rates on offer, the level of interest-free overdraft available, unauthorised overdraft rates and lastly the freebies, as although useful, the value of these will be low compared to interest-free overdrafts.
"For many students debt becomes an unfortunate fact of life and while this doesn't mean they should throw caution to the wind and spend freely, the good news is that banks recognise this and as such offer favourable borrowing terms.
“Interest-free overdrafts are a key feature of student accounts and they undoubtedly ease the burden of trying to fund a university degree.
"In-credit interest rates are also an important consideration for some students. For those lucky enough not to be living their life in the red, the in-credit rate is more important than the overdraft facility.
Most student accounts pay just 0.1 per cent on balances in credit, although
HSBC and Santander offer two per cent on amounts up to £1000 and £500 respectively
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