The Scottish Mail on Sunday

Student account perks test: Discounts ... or downloads?

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A-LEVEL students who have met the grade and are soon off to university will be taking charge of their finances, perhaps for the first time. LAURA SHANNON explains to students – and parents or grandparen­ts advising them – what they need to know before term starts. HOW TO PICK A STUDENT BANK ACCOUNT

A BANK or building society account is the bedrock of a student’s finances and most will want it to come with a generous interest-free overdraft. This is a sum of money you can borrow and repay without charge.

Overdraft sizes vary between banks and sometimes term times – increasing as the course continues. Be aware that you might not get the maximum overdraft available as it depends on your circumstan­ces.

Rachel Springall, of financial research company Moneyfacts, says: ‘Students need to be sure that the account can support them through their years of education.’

But while a good-sized overdraft is important, Springall also sounds caution about using a bigger overdraft than you realistica­lly need.

She adds: ‘Using an overdraft is an effortless temptation, and while they are indeed designed to help students cover expenses, they should never be abused as the debt will need to be paid back at some stage.’

Check what banks are present on or around your university campus. But if you are comfortabl­e doing most of your banking online, your range of options opens up. Most accounts will also offer cashback rewards for high street shopping or other similar discounts.

To open an account you will need to take your UCAS acceptance letter with you to the bank, identifica­tion such as a passport, and proof of address.

TOP ACCOUNTS

TWO of the best student deals are from HSBC – £3,000 overdraft, £60 Amazon voucher and 12-month Amazon Prime deal – and Santander for its average £1,500 overdraft and four-year Young Person’s Railcard, which cuts the cost of train travel by a third. Both banks also pay interest if you keep money in your account rather than borrow.

Nationwide Building Society has launched its first ever student account this year, offering a competitiv­e deal with an overdraft of £1,000 escalating to £3,000 in the third academic year. The FlexStuden­t account pays 1 per cent on savings in the account up to £1,000 – a maximum £10 a year. Savings interest is minimal on student accounts if paid at all.

The building society will also pay five lucky student customers £15,000 to share with their parents. Winners will be chosen at random in a draw taking place on January 10 next year. Entry is both free and automatic – unless you ask to be left out – but the prize draw will close to new entries on November 30.

A TIP FOR PRUDENT STUDENTS

CANNY students who trust their own financial acumen could benefit from opening two student accounts. Banks try to dissuade you from doing this but it is possible and by doing so you can have one account for a large overdraft – and another for the free perks and savings interest. Hannah Maundrell, editor of comparison website money.co.uk, says: ‘Put your student loan in the perks account. Then set up your direct debits – for phone and broadband for example – to go out of it. ‘Leave the account’s debit card in a drawer and never use it for spending.’ She adds: ‘Work out how much cash you need for food and fun each week and set up an automatic transfer from this to the second account with the large overdraft which is then used for spending.’ Banks might demand their particular deal is treated as your ‘main account’ and will require a minimum sum to be deposited each term or year. But you can set up an automatic transfer from one account to another and then back again to get round this obstacle.

KNOW ABOUT FRAUD

BEWARE of typical tricks a fraudster will use to gain access to your account.

The Student Loans Company is warning that a scam email is in circulatio­n targeting freshers and existing students.

It looks as if it has been sent by Student Finance England – part of Student Loans Company – and warns that failure to respond with personal informatio­n will cause students to ‘lose or delay’ their first loan payment in September.

Do not reply with sensitive financial informatio­n and avoid clicking on any links in the email, which could download ‘spyware’ on to your computer. This allows a criminal to monitor your use of the computer and see passwords you enter when logging into bank accounts.

It is one example of a popular scam known as ‘phishing’, which mimics email addresses of people or companies you know or do business with.

Fiona Innes, head of counter fraud services at the Student Loans Company, says: ‘We want to remind customers that we will never request a customer’s personal or banking details by email or text message.’

Anyone who receives a scam email about student finance should forward it to phishing@slc.co.uk to help get fraudulent accounts shut down.

Be suspicious also of phone calls supposedly from your bank – even if the name of your bank comes up on your phone’s screen when taking the call. Criminals often sound profession­al and gain your trust until you are vulnerable enough to reveal a PIN or transfer money to a ‘safe account’, which your bank will never ask you to do.

 ??  ?? CAREFUL: Hannah Tarling is heading off to Manchester University
CAREFUL: Hannah Tarling is heading off to Manchester University
 ??  ?? ADVICE: Hannah Maundrell
ADVICE: Hannah Maundrell

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