Like most others, students should have access to a current account for managing day to day finances. Most major banks and building societies offer specific student accounts with beneficial rates and terms. Student accounts are basically like regular current accounts, except for the extra features geared towards helping you deal with finance issues that most students won’t have had to think about before University.

The big question is which one to go for. Most will be readily accessible offering online and telephone banking facilities and free cash machine withdrawals. You therefore need to base your decision elsewhere. Keeping it simple, there are two key issues to bear in mind when selecting a provider.

First of all, do not be taken in by the freebies on offer. Make sure you get the best account first. The value of freebies confuses the longer term issue and they are basically a ‘bribe’ to hook you in at a young age and hopefully obtain a customer for life. The value to you of a freebie pales into significance compared to the second issue to consider.

The key issue is to look for an account offering the longest 0% overdraft facility. All student accounts offer overdrafts, enabling you to withdraw (ie borrow) more money than you’ve put in there. As a student, you will almost certainly have to do this at some point. It is a fact that you are more likely to be in debt than the fortunate position of saving money. When it comes to students, banks allow you to borrow interest free, provided you stay within the limits. Therefore look for the bank that gives the most 0% borrowing for the longest period. This will be the most valuable benefit to you over the longer term.

However, be very careful with overdrafts….

• Never go above the agreed limit without agreeing this with your bank beforehand. If you do, you could be hit very hard with additional interest and penalties. Always talk to your bank first. If you get this wrong it can leave you with credit rating problems, lasting years.
• Never borrow more than you need, always remember that once you graduate you’ll have to repay these debts, so budget as best as you can and never spend more than is absolutely necessary.
• You will be credit scored. When you apply for any debt product, including a bank account with an overdraft, the lender will credit score you. This is to decide how desirable a customer you are based on behavioural predictions from all your prior financial data. Always be careful to avoid anything that can worsen your scoring.

Finally, returning to the freebies if all else is equal with overdraft facilities then these can certainly help make up your mind, so enjoy!