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Switching from a student bank account to a graduate bank account

Switching from a student bank account to a graduate bank account

Once you’ve graduated, your bank will often automatically switch your student account to a graduate account. This guide will help you understand whether switching to a different bank could be beneficial in finding a more suitable deal for you.

Tom Harrison
Content writer
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Posted 24 OCTOBER 2019

What is a graduate account?

A graduate account is a current account specifically aimed at those who have just graduated from university. Those in credit can even get even get access to deals up to three years after you’ve graduated. If you have an existing student bank account, your bank may automatically switch your student account to a graduate account when you graduate.

How does it differ from a student account?

Once you’ve graduated, you’re no longer entitled to a student account. A student account’s overdraft facility often remains at the same limit for your three years you’re studying (unless you actively apply for an increase or decrease on your overdraft limit).  

However, a graduate account is designed to help you start reducing your overdraft that you may have built up whilst you were studying. This means that your overdraft limit will automatically decrease each year – the amount it decreases by will vary depending on the provider. 

Can I open a graduate account with a different bank?

Yes, you don’t have to stick with your current bank when you open a graduate account, especially if you find a deal that better suits you elsewhere. You’ll usually be able to transfer an outstanding overdraft to your new graduate account and your old graduate/student account with your old bank will be closed. 

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What happens if my student account has automatically changed to a graduate account?

If you’ve graduated in the past three years you can still switch your graduate account, even if your existing bank has automatically switched your account from a student to a graduate account. 

If you’re thinking of sticking with your current bank, it’s important to ask if your overdraft limit will be reduced and when you’ll start being charged interest on the overdraft. 

What perks can I get with a graduate account?

Graduate accounts often come with exclusive deals for up to three years after you’ve graduated -including mobile phone insurance, RAC breakdown cover, access to a legal advice helpline, deals on flights, holidays and gigs. The perks you get will vary from provider-to-provider. Note that some of providers may look to offer perks, however they aren’t free and you may pay a monthly fee to have access to these benefits – so be sure to check the terms and conditions. 

Do I have to open a graduate bank account?

No, you don’t have to open a graduate bank account once you’ve graduated. If you decide you don’t need the benefits of an overdraft facility, there might be other advantages included in a standard current account  that suit your needs better. 

How easy is it to switch accounts?

When you open a new account, you’ll have to tell your new bank that you want to switch accounts. You’ll have to fill in a Current Account Switch Agreement and an account closure form, then your new bank will do the work for you. It will take just seven days to switch as part of the switch guarantee. 

What else should I think about when switching graduate accounts?

As with student accounts, graduate accounts will usually offer a preferential package that includes an interest free overdraft – consider going for the longest 0% interest overdraft you can find. Be cautious that some banks will reduce the amount of authorised overdraft each year – gradually reducing your credit limit before eventually cutting off the interest free period. It’s important to ask either your current bank or the one you’re thinking of switching to, when these dates will come into effect.  

This is an opportunity to balance and budget after your graduation and to come up with your own financial plan to pay back the money. 

Comparing graduate accounts

Being loyal to your current bank doesn’t always work in your favour, so make sure you shop around for competitive overdraft deals to find one that suits your needs. Using our comparison tool, you can compare and check out  the graduate bank accounts  we have on offer.

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