Sinead Ryan: Why the banks welcome students with open arms
Banks welcome students with open arms, with deals on loans and accounts
YOU’VE got the points, secured your college place and may very well be scrambling for scarce accommodation. One thing is certain: you’ll want to make sure your meagre finances are sorted for the next few years.
This week, I’m looking at student accounts and loans. It might surprise you, but most banks really like students.
They offer them free banking and low-cost credit. Why? Well, it’s all about prospects.
If you’ve made it to university, the chances are you have earning potential in the future, and banks know that you’re far more likely to stay with them if they offer a cheap, friendly service to flog you the
profit-making stuff like credit cards and mortgages later on.
Current accounts
You will need one if you’re planning on getting a job, running any direct debits for Netflix, Wi-Fi or rent, or simply need to top up your Leap card or pay for trains home. You won’t be charged account maintenance fees or transaction charges until you’re 23 in most cases, but this is worth double-checking. Most students plump for the bank on campus, but many are now moving offsite, driven away by huge costs imposed by universities for the privilege. If you’re in a college town, at least check out the competition. KBC Bank is offering €50 for opening a new Student Current Account, and has a nice range of ‘digital wallets’ which support Apple, Google, FitBit, and other tap-and-pay arrangements.
Bank of Ireland, AIB and PTSB offer cashback on connected retailers like Dunnes, Wagamama, Just Eat, Boots and Currys. To open an account, you’ll need at least one form of ID (passport, age card, etc) and a utility bill in your own name.
You’ll get a debit card and from there can open (for free) one or more savings accounts.
This means you can begin to put money by for rent etc immediately. Most banks allow you name deposit accounts, and since they don’t cost anything, it’s a good idea to have a couple. One for actual savings (i.e. your emergency, don’ttouch fund), and another for rent, bills, etc that you’ll need to fund each month.
Bank apps are excellent; you can easily move money between them at a tap.
E-banks
Revolut has been, well, revolutionary, as many students have discovered.
It allows simple and instant money transfer (for nights out, taxis, etc) between friends and very low-cost foreign exchange. Beware the ATM charges though; even though up to €200 per month is free to withdraw, after that it’s 2pc, which is a lot. The debit card costs €6. Revolut is not a bank – there are no credit or overdraft lines, so you’ll need a regular account to support it. It’s handy, but won’t cater for all your banking needs.
For N26, the German-based e-bank’s debit card is free, but it only allows five free ATM withdrawals a month; after that, it’s €2 each. It has a banking licence, and supports Google and Apple Pay.
Student loans
Nobody gets by without funding. The Bank of Mum and Dad may be your initial portal, but accessing loans like a grown-up is also likely.
AIB offers interest-free overdrafts up to €1,000 for first/ second years. It also has loans up to €50,000 at 8.45pc. This requires a current account and guarantor.
Bank of Ireland lets students borrow up to €10,000 at 5pc p.a. with some deferred payments, which will compete with your credit union (who you should definitely investigate), while Ulster Bank’s free overdraft (€750 up to €2,500) depends on what course you’re doing and if it’s grant-assisted.