Youve graduated so what happens to your bank account

With summer graduation ceremonies now taking place across the country, thousands of twentysomethings are contemplating their post-university futures. One of the many things they will have to get to grips with is changes to their banking. We look at what this entails.

Do I have to change account?

Ultimately, yes. Unfortunately, the joys of the interest-free student overdraft will come to an end, and you can’t stay on your student account without a current letter of attendance from a higher learning institution.

So what happens?

In stark contrast to the scramble of high street banks attempting to seduce freshers with the promise of free railcards and gift vouchers, the transition to a graduate account is usually far more sedate. You will probably get a letter from your bank stating when your student account will be automatically converted into a graduate one. These accounts are better than conventional accounts, but not as good as student accounts. For example, NatWest’s graduate account allows an interest-free overdraft of up to £2,000 in the first year after university, but it reduces each year after.

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Which bank provides the best deal for new graduates?

Both Save the Student and MoneySavingExpert.com highlight Santander’s 123 Graduate current account, which comes with an interest-free and fee-free arranged overdraft of up to £2,000 for three years.

With the Lloyds Bank Graduate Account you can apply for a tiered interest- and fee-free arranged overdraft of up to £2,000 in your first year after graduating, £1,500 in your second year, and £1,000 in your third year.

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