Better offers than when I was a student, and that was less than a decade ago. It was only really Santander that seemed any good to me. Nowhere from my memory was giving away cash.
I went for Santander for the Railcard. I still have the account and still have a £1800 overdraft on it (although not interest free anymore). They also had another offer for getting another 4 year Railcard by opening a savings account and I happily made use of that. I’ll have had 8 years of Railcard from Santander by the time this newer one expires.
That’s exactly how I got into financial trouble when I was at university. I was naive and saw the overdraft as free money because there were no penalties or interest to pay.
Then you graduate, the 0% period ends, and suddenly they start piling on the interest.
With Nationwide, once you graduate they transfer you onto a FlexGraduate account for 3 years if you’ve done a 3+ year course. It stays interest free, but they reduce the amount you get each year after graduation.
For 3 year courses
Your arranged overdraft limit will reduce in steady steps over 3 years after you graduate.
At the end of year 1, we will reduce your maximum arranged overdraft limit to £2,500.
At the end of year 2, we will reduce your maximum arranged overdraft limit to £1,750.
At the end of year 3, we will reduce your maximum arranged overdraft limit to £1,000.
So in…September 2032, I’ll be left with a £1k overdraft on what will then turn into a FlexDirect Account, and Nationwide will start charging interest on it at 39% (but I should still have £50 of that be interest free, subject to Nationwide still offering that in 2032).
Then students shouldn’t sign up to accounts that they don’t understand. It was pretty obvious what the overdraft was for and how it would changed after graduation to me and others who happened to mention it
Even if they don’t understand it at the start, they’ve got the rest of the course to put at least a little thought towards it and research it so they don’t get caught out at the end
It’s encouraging people to borrow when they don’t even earn much because they’re in full-time education, and it’s arguably one of the worst forms of borrowing too.
I didn’t flag your post, @jo, but I would have considered it if you were calling people stupid. We can review your financial decisions too and decide whether they’re particularly smart?
No, students aren’t just starting out, they’ve gone through A levels, which are, or at least used to be, quite hard work. Overdrafts are quite easy to understand if they can be bothered to read the bank’s explanation of how they work. If they only read the bits about the free money and free gifts, and don’t understand that they will have to pay the overdrafts back, eventually, then more fool them.
Students are often starting out managing their own finances for the first time, living away from home, learning how to budget, pay for accommodation, bills and other expenses. Encouraging them to borrow at that stage, when they have little or no income, seems particularly irresponsible.
I appreciate that, but if it’s something new to you, that you don’t fully understand, you should look into it thoroughly, and make sure you do understand it, before you jump in with both feet.
That was poorly worded on my part. This wasn’t meant to be an attack on anyone here.
What I meant was that there are people who wouldn’t actively look to find a better savings account, and they’d just stay with their main banks savings account because it’s what they already have, and why bother changing.
You’ve made a choice to keep yours in NatWest, that’s different. You’ve looked at other accounts and decided that works for you. Same with me. I could be earning 4.5% on my short term savings. I choose to have it with Nationwide.
Growing your money with a good interest rate is not the only, nor for many people the main, purpose of saving it. First and foremost, you save towards your retirement, or for a holiday, or a new car, etc., or just for a rainy day. Personally, although I like to have the best interest rate I can get, I’d still save my money even if savings accounts didn’t pay any interest at all.
Having said that, I know that many people don’t have any savings at all, even when they could afford to save. They just don’t want to.
