A student bank account is one of the most important things you should take care of before starting your first year at college. Choosing the right kind of bank account helps you through your university years smoothly, while enabling you to manage money more efficiently. To ensure that you make the right choice, here are four things you should know about student bank accounts.

Student accounts come with overdraft facility

Being able to pull through your college years only with the money in your account can be great. However, that’s not usually possible for most students. When you are out of cash and need more money, you can approach the bank for help. Banks offer what is called the overdraft facility, which is more or less like a small loan.

When you select a bank for your student account, be sure to check the size of the overdraft and the interest rates that are applicable to it. While some banks offer only ‘upto’ a certain amount per annum, some have a tier system and may increase the overdraft amount every year. For instance, banks following the tier system may offer ?1000 in the first year, ?2000 in the second, ?3000 in the third and so on, while others may offer a fixed overdraft of upto ?2000 every year. 

Added advantages of student accounts

Many banks are generous when it comes to student accounts. They offer incentives like discount coupons for laptops or other useful appliances and gadgets, student insurance, rail cards, traveller’s cheques etc. However, it is best to have clear idea about what these incentives actually are and how they can be useful for you before making a choice.

Interests and fees

When it comes to overdrafts, banks usually charge an interest on the amount they lend you. Some banks may not charge overdraft interest, but that is only for a certain period, or upto a certain amount of money borrowed by you. That is why, it is important to go through the terms and conditions that apply to overdraft before you select an account.

What to avoid

When in university, it is best to stick to bank overdrafts in case you need additional money. At all costs, you should avoid unauthorised loans or use credits cards as they have very high interest rates.