The beginner’s guide to graduate bank accounts

Student bank accounts offer fantastic perks, and they don’t all have to disappear after graduation.

Whether embarking on a year of travel or starting your career, a diverse selection of graduate bank accounts are available to cater to your needs.

While the best things in life are free, you’ll need a current account to manage your finances for those that aren’t.

Join us as we delve into graduate accounts and examine what each UK bank offers.

What is a graduate bank account?

A graduate bank account is designed for individuals who recently completed a higher education programme. These accounts typically come with no monthly fees and offer an arranged overdraft.

Different banks may sweeten the deal with extra perks, so explore your options.

Your graduate account should be your only current account, and your income must be deposited monthly. Many accounts also specify a minimum monthly deposit to keep the account active.

What happens to your student bank account when you graduate?

After you graduate, most student bank accounts seamlessly transition into graduate accounts, requiring no action on your part. Your account details, including your card and PIN, usually remain unchanged.

While some banks might proactively reach out to explain the transition process or provide account options as you complete your university course, researching accounts yourself is advisable.

Your current bank may not offer the most favourable terms, so comparing graduate bank accounts is crucial to ensure you get the best deal.

When can you have a graduate bank account?

Graduate bank accounts are available for application only after you’ve successfully graduated from university. Typically, this option is accessible within three years of your graduation date.

While you can sometimes apply at any point within those three years, opting for a three-year graduate account when you’re a few months away from the deadline wouldn’t be practical. This is because you’d be required to switch to a regular current account immediately.

If it’s been more than three years since your graduation, you must apply for a standard current account instead of a graduate one.

How long can you have a graduate bank account?

You can enjoy the advantages of graduate banking for a maximum of three years, with some accounts only being available for two years.

Graduate overdrafts

No comprehensive guide to graduate bank accounts would be complete without diving into the topic of overdrafts. After all, many students live deep in their student overdrafts, making clever management of debt crucial upon graduation.

Make the most of 0% interest offers on your graduate overdraft and use the grace period to reduce your debt each month. Repaying an overdraft becomes significantly more challenging when interest charges are in play.

If you have a substantial overdraft from your student days, your best option is the graduate account that offers the most significant interest-free overdraft — ideally for the longest duration possible.

Remember approval for an overdraft isn’t automatic, and the granted amount may not align with your expectations.

Your credit rating can provide valuable insights into the likelihood of securing a generous overdraft with your graduate account, so check that before you apply.

If you didn’t use your student overdraft, consider opening a standard current account instead of a graduate one — some reward you financially with up to £200 for signing up.

What are the best graduate bank accounts in 2023?

The ‘best’ graduate bank account is subjective, as what might work well for you might not suit someone else.

We’ve gathered the current offers from each UK bank to save you the leg work.

Barclays Higher Education Account

• A three-year account (depending on when you apply).
• No monthly account fees to worry about.
• Benefit from an arranged overdraft with the potential for up to £1,500 interest-free (subject to application, financial circumstances, borrowing history, and lending criteria).
• The option to join Blue Rewards for £5 per month — a scheme that provides cashback on spending.
• Enhance your account with optional add-on ‘packs’, including travel, breakdown, and tech insurance.
• Gain access to a high-yield 5.12% savings account to help grow your money.

HSBC Graduate Bank Account

• Enjoy a two-year account duration (depending on application timing).
• No pesky monthly account fees to contend with.
• Benefit from an arranged interest-free overdraft, potentially up to £3,000 in the first year and £2,000 in the second (subject to status).
• Upon entering the third year post-graduation, enjoy a seamless transition to an Advance Account or an HSBC Bank Account, potentially granting you access to a £1,000 interest-free overdraft for 12 months.
• Unlock exclusive discounts on shopping, dining, travel, and more through the HSBC home&Away programme.
• Watch your savings grow with a lucrative 5% regular saver account at your disposal.

Nationwide FlexGraduate Account

• A two or three-year account, depending on your course duration.
• Enjoy the convenience of zero monthly account fees.
• A two-year account may grant you an arranged interest-free overdraft of up to £1,500 in the first year and £1,000 in the second (subject to status). The three-year account could provide an interest-free overdraft of £2,500 in year one, £1,750 in year two, and £1,000 in year three.
• Participate in Community Boards, where you can vote for the housing charities Nationwide should support, making a positive impact.
• Access exclusive savings opportunities, such as the Flex Instant Saver, offering a 3.25% interest rate.

TSB Graduate Bank Account

• A three-year account, depending on your application timing.
• Say goodbye to monthly account fees.
• Secure an arranged overdraft with the potential for up to £2,000 interest-free, subject to successful application and approval.
• Explore the option of graduate loans, subject to your financial status.
• Use Save the Pennies — a unique savings feature within the TSB app, rounding card payments to the nearest pound to help boost your savings effortlessly.

Lloyds Graduate Account

• Benefit from a three-year account.
• Relish the freedom from monthly account fees.
• Secure an arranged overdraft with the potential for up to £2,000 interest-free during your first-year post-graduation, £1,500 in your second year, and £1,000 in your third year.
• Gain access to the innovative online Money Manager service, simplifying your spending by categorising purchases and offering a comprehensive overview of your financial habits.
• Use Save the Change to accumulate savings effortlessly — this feature rounds up debit card transactions to the nearest pound.
• Enjoy Everyday Offers, a scheme that provides discounts at various shops and restaurants.
• Earn monthly interest at a rate of 2.0% AER when your account is in credit.

Halifax Graduate Current Account

• Enjoy the benefits of a three-year graduate account.
• Experience freedom from monthly fees when your account remains in credit.
• Secure an arranged interest-free overdraft of £1,500.
• Access Cashback Extras — a rewarding scheme offering a 15% discount at select retailers, including Costa Coffee and Just Eat.
• Use Save the Change to build savings effortlessly. It rounds up your transactions to the nearest pound and channels the difference into a designated Halifax savings account.
• Earn interest at a rate of 0.50% AER when your account is in credit.

NatWest Graduate Account

• A three-year account.
• Enjoy zero monthly account fees.
• In your first year post-graduation, obtain a substantial interest-free arranged overdraft of £3,250, which gradually decreases to £2,250 in the second year and £1,250 in the third.
• Receive a complimentary tastecard for generous discounts on dining, top attractions, and cinema tickets.
• Seamlessly manage payments with PayMe — facilitating easy reimbursement from friends — and Split Bill to efficiently share expenses for meals, taxi rides, and bills.
• Harness the power of NatWest Round Ups — a feature accumulating spare change with every debit card transaction.
• Keep tabs on your credit score effortlessly, accessing it for free within the app whenever you need.

Royal Bank of Scotland Graduate Account

• An account that lasts three years.
• Experience the convenience of no monthly account fees.
• Apply for an arranged interest-free overdraft, with limits of £3,250 in the first year, £2,250 in the second year, and £1,250 in the third year.
• Savour a complimentary tastecard, offering discounts such as 2 for 1, 50% off, and 25% off dining expenses. Additionally, enjoy discounts on cinema tickets and top attractions.
• Simplify financial transactions with PayMe and Split Bill, facilitating seamless money transfers among friends.
• Gain insights into your spending habits through an in-app expense tracker, helping you effectively monitor your finances.
• Stay informed about your credit score anytime, as you can check it for free directly within the app.

Santander 1|2|3 Graduate Account

• An account you can benefit from for two years.
• Enjoy a monthly fee-free account.
• Gain valuable spending insights with My Money Manager, accessible through the Santander banking app.
• Receive a complimentary 16-25 Railcard for one year, unlocking substantial travel savings.
• Access the enticing Santander Boosts scheme, which offers cashback when you spend with select retailers, alongside discounts and gifts.
• No interest is accrued on this account when your balance is in the black.
• Secure an arranged interest-free overdraft with a potential limit of up to £2,000 in the first year and £1,000 in the second, easing financial flexibility.

The Co-operative Bank Graduate Account

• Graduates seamlessly continue with their existing student account at the Co-operative Bank, with the requirement to settle their overdraft within one year of graduating. While it’s possible to apply for this account as a graduate, there are no additional benefits.
• Following the initial year, the account automatically converts to a standard Co-operative Bank current account. If you haven’t cleared your overdraft by then, you must apply for an arranged overdraft for your new account. It’s important to note that approval for this overdraft isn’t guaranteed, and if granted, interest will be charged at an annual rate of 35.9%.
• There are no monthly account fees to contend with.