Taken into account

The background on banks... and how to pick the best one
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The Independent Online

Do you already have an account?If not, you will find banks queuing up for your custom when you start at uni or college. The major ones normally take a stand at the Freshers Fair.

Do you already have an account?If not, you will find banks queuing up for your custom when you start at uni or college. The major ones normally take a stand at the Freshers Fair.

Why do they want you? After all you are hardly a high earner No, but you might be. Graduates earn higher salaries, on average, than people who haven't been through higher education. Customers often stay with one bank all their life. So those smart marketing types at head office calculate that it is worth their bank's while to be nice to you now. They see (rubbing their hands) the fees they can charge you later for mortgages, personal loans, travel currency, life insurance and other services coming their way.

Before you rush to open an account, it's worth comparing the deals on offer. Most banks offer sweeteners. (The Bank of Scotland is an exception, preferring to offer "a great student account".)

The offers will have changed by the autumn, so we won't reproduce all the details now - but, for example, goodies you could have collected last year included: £20 of vouchers to spend on books, CDs, videos or computer games from Barclays. Or £50 cash or a Young Person's Railcard for four years - just think of all those visits to friends at other unis - from HSBC.

The year before, NatWest was offering £50 if you opened your account at a special Student Banking Service branch (£35 otherwise) or a BT pager. Lloyds TSB was also offering cash - £35 (or £40 if your parents were its customers). Mobile phones, portable CD players and driving lessons have been offered in the past. Wait until around July this year to see what the marketing teams come up with.

Many of the banks offer all kinds of other services: discounts and special offers throughout the year, commission-free foreign currency, a fee-free Visa or MasterCard, Internet banking and student insurance. Several have insurance packages specially tailored for students: cover includes computer, mobile phone and accidental damage to landlord's furniture! (See our article on insurance, page 30.) They also offer free banking - no charges for running your account, plus interest-free overdrafts of varying amounts.

All that glitters is not gold(Well, it might be for the bank!) A sad fact of life is that everything has to be paid for. So that free overdraft isn't extra spending money, it's another loan. It will have to be repaid at a time specified by the bank. It's important to check when this will be. Unauthorised borrowing costs money. If you let the overdraft go above the agreed limit, you'll pay high interest charges. Make sure that you know whether the overdraft is automatic or whether you have to fill in an application form first.

Credit cards are dangerous animals. Only accept one if you trust yourself not to run up huge debts. You'll probably be offered a credit limit of £500.

Other considerations worth checking before taking the goodies

Is there a branch near uni or college? You might know your hall or lodgings address but you could well be living somewhere different next academic year. Does the nearest branch have a student banking officer/adviser? This could be useful if you are not a good money manager. Student officers are usually recent graduates and will be able to help you to plan your budget/avoid pitfalls.Is the introductory offer something you really want?Remember the golden rule: always tell your bank if you run into financial trouble. Don't run up debts. Ask for help.