Things you need to know about student bank accounts

Read on and understand important terms related to student bank accounts.

09:22 05 May 2013

So, you’re old enough to take the leap into student living. Although this could be the most fun part of your life, it’s important for you to understand that there are some things that you need to take care of before you start the fun.

One of them is getting a student bank account. In order for you to understand this type of account better, let me explain some terms that you’ll most likely to encounter on a regular basis.

• Overdraft. This means that you can withdraw money from your bank even if you don’t have it yet. This is one way of borrowing. Student accounts are not charged overdraft fees but you will have to pay transaction and interest if you exceed your overdraft limit.

You can pick a student bank account with higher overdraft limit. However, you must think about this carefully as you’ll need to pay for this loan.

• Interest rates. Interest is the amount of money that you’re going to receive for putting your money in the bank. When choosing your bank account, it’s important that you choose the one that offer the highest interest rate so you can earn additional money.

Interest rate also apply to overdrafts. But as a student, you don’t have to think about it. However, keep in mind that once you graduate, your overdrafts will start incurring interest.

• Freebies. Banks run special promotions every now and then to entice more people to sign an account with them. Some will offer free money off your mobile phone, free items, discount travel cards, etc.