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Having graduated, you
will no longer be entitled to the Student Account package offered
to you by your bank while you were at University. However, most
banks automatically move you on to their Graduate Account packages
which mostly offer a range of attractive facilities such as cheap
loans and mortgages etc. not available to the general public.
However now that you
are hopefully starting to earn a decent income, should you go for
the "automatic upgrade" or shop around?
You may think you have
such a good relationship with your current bank that even considering
changing bank is out of the question for you. However, it usually
does make sense to have a look at what else is available to make
sure you are with the bank offering you the best possible package
for you at this important stage in your life.
Having supported you
through University with interest free overdrafts and the like, most
banks are keen to keep your custom once you graduate to recoup their
investment and benefit from your increasing spending power. However,
from your side, that is no reason to stay!
These days changing bank
is a simple process and you should not be afraid to at least consider
whether, by doing so, you would actually be better off.
So just what do the banks
have to offer you now that you're a graduate? Graduate UK has been
looking at various options for you:
Abbey
Abbey, the recently re-launched
face of Abbey National offers an interest free overdraft of £2000
reducing over 3 years. It has loans up to £10k and commission
free travel money. Those of you who are able to keep money in your
current account will benefit from their credit interest rate of
2.53%AER gross, one of the best around.
Barclays
Barclays offer an interest
free overdraft of £1500 for 2 years and loans up to £10k
at a rate of 8.9%APR with the option of a 3 month repayment holiday.
It also gives fee free travel money and £30 Waterstone/HMV
voucher when you first use their fee free Graduate Barclaycard with
a credit limit up to £4k.
HSBC
HSBC give an interest
free overdraft of £1500 reducing over 3 years. You can also
get a fee free credit card and travel discounts. This bank offer
the biggest Graduate Loan as it may lend up to £25k repayable
over 8 years at a typical rate of 7.9%APR.
Lloyds
TSB
Lloyds TSB have graduate
overdrafts of £2000 reducing over 3 years on an interest free
basis. Loans up to £10k are available at 7.8%APR with a 4month
repayment delay option. Fee free travel money is available together
with £40 cashback if you take up their mobile phone offer.
NatWest
NatWest offer interest
free overdrafts of £2000 reducing over 3 years and loans up
to £15k. A range of useful services are available including
help with finding a job, home finding and special mortgage terms.
Discounted holidays and travel insurance with fee free travel money
complete the package.
Royal
Bank of Scotland
Royal Bank of Scotland
give you the option of an interest free overdraft of £2000
for one year or a loan of this amount to repay your overdraft over
2 years. Loans up to £15k are available with a long repayment
deferral period option of up to 9 months and at a very competitive
typical 6.6%APR. Discounts on books,CDs concert tickets and holidays
are also offered.
Others
Most of the other banks
do not have special graduate deals although Alliance & Leicester
have an interest free overdraft of £2500 for a year with free
annual travel insurance and £25 if you open an account online.
It also pays interest on credit balances in its Premier account
at 2.12%AER gross.
First Direct is a division
of HSBC and has a high customer satisfaction rate with its good,
"human" telephone service, whilst some people are attracted
to Smile (the internet service of the Co-operative Bank) because
of its ethical investment policy and 3.0%AER credit interest.
Nationwide considers
loans up to £20k at the good rate of 6.7%APR with no early
repayment penalty, and no commission on travel money ordered online
Conclusion
Hopefully you will find
a package which suits your needs from this selection. The details
were correct in February 2004 but may be changed, or offers withdrawn,
at any time so you should always check the individual banks' websites
to find the latest details.
Why not browse
the Personal Banking section of our Web Directory for banking
links?
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