when does a student bank account stop being a student bank account???

katmad99

Hi, i'm sorry if this had been discussed elsewhere, i have searched but not found what i am looking for.

I am a third (final) year student and am well into my interest free overdraft with my HSBC student account. I am interested in finding the best graduate account after my final year.

I am worried as i do not know, and cannot find out (on thier website at least) what HSBC consider the 'end of' my final year?? Basically i am scared that suddenly my bank account will stop being a student bank account and that i will be hit with a large interest rate on my overdraft.

I would just like to know when banks consider your final year to be 'over' and so i know when to pay my overdraft off and look into graduate accounts. Looking on the websites all i can see is vague phrases like "after your third year", which dont specify exactly when i should sort myself (and my money!) out!

Would it be after graduation?? or at the beginning of september when a new university year begins and i am no longer a student?? or exactly three years after i opened the account???

Please help. I am not normally this clueless about money but this has stumped me as i can find no specific guidelines.
Thanks in advance for any advice.
Kat

aqueoushumour01

i can't remember exactly but i think mine switched over june or july. i got a letter about it a few months before

poochel

I think the 'year' ends on 30 June, but you could always give them a quick call or send them a secure message via your internet banking to check.

Don't worry, your account won't suddenly stop being a student bank account and you won't be hit with overdraft fees. My student account was with HSBC, it automatically got switched over to a graduate account and the overdraft continued. The interest-free amount slowly reduces over a period of 3 or 4 years, although the overdraft limit doesn't. Now I'm working I get my salary paid into an account with another bank (which actually has decent interest!) and transfer a small amount every month (about £50) to HSBC to slowly clear my overdraft. Nearly 3 years after graduation I've now only got a little bit left to pay off, I think my interest free period runs out 30 June this year. I feel I have managed my 'debt' to HSBC well, paying off £1500 over 3 years and not incurring any interest on it.

BTW having your student account automatically converted into a graduate account shouldn't prevent you from opening up one elsewhere.

Feanor

Hi,

I finished my course in May, but my graduation was in September 06. I now have until September 2007 interest free on my overdraft, until i start paying interest. I dont think the interest rate is all that bad either so its generally not too much of a shock and it certainly wont happen overnight.

I just gave my bank a call to find out and they gave me all the info i required over the phone.

x

newfoundglory

Depends on your banks

I had my student account with Lloyds TSB, which was a cracking deal. It was convered to a graduate account end of 2006, and the overdraft lasts for another 3 years interest free. It gets "smaller" ever year tho - £2000 yr 1, £1500 y2, £500 yr 3. I use mine and pay it into the LTSB 8% regular saver account - lloyds pay me for borrowing their own money!

poochel

newfoundglory wrote: »

the overdraft lasts for another 3 years interest free. It gets "smaller" ever year tho - £2000 yr 1, £1500 y2, £500 yr 3.

feanor i think you have a pretty raw deal, only having 1 year interest free to pay it off. both mine (HSBC) and newfoundglory (TSB) give you 3 years interest free, gradually reducing. you should definitely look into more competitive accounts, even if you are able to pay off your overdraft in 1 year you should take advantage of what is effectively 'free money'

katmad99

thanks for your help, at least i can stop worrying about getting hit with a big interest rate without knowing!! (i dont trust banks not to try to screw me over!) Good to know the HSBC graduate account gives you 3 years to pay the overdraft back too, i will check that this is still the case. I'll start looking for better deals elsewhere just in case once my exams are over. thanks again
kat

jrrowleyws

Erm...

Nobody other than your bank can advise of this. Go see them!

katmad99

jrrowleyws wrote: »

Erm...

Nobody other than your bank can advise of this. Go see them!

i know, but i thought i would come here for some advice first, so that my bank dont talk me into getting a bad deal because i dont know any better. Just nice to know others' experiences first so i can compare and see if i'm getting a good deal.

Estavez_2

I had a student account with HSBC and this is what happens.

When you graduate your account becomes a Graduate Account and your 0% overdraft stays as it is. For 3 year courses this is typically 1.5k I believe. Then after a year it gets reduced to 1k then 500 the next and finally 0.

But something slightly different happened to me! (so be warned!)

I did a three year course, but they must have thought I was doing a four year one as I remained having a student account, and my overdraft went up to 1750 interest free Then after a year they presumed I had graduated but for some reason I got my account turned into a normal bank account and got sent a letter saying I could keep my overdraft at £1500. But it wasn't interest free.... So being charged interest I went into the bank and confused them with my tale who then turned it to a Graduate account. The interest was refunded as soon as it went out and all was good (even had the grad account as if I was in my first year of leaving uni, when it was my second year. So got even longer 0% overdraft period).

All was good until I got charged interest AGAIN! Very perplexing. So ended up going and paying them a second visit, and got it all sorted. Seems to be OK now!

So basically katmad99, you should automatically get a grad account with your 0% overdraft in place with HSBC (and it'll reduce in size each year). But the truth is the banks seem flexible as they want to keep your business, isn't that the whole point of the student bank account?? My flatmate ended up moving to A&L because of their interest deals on current accounts. He managed to negotiate a 3 year interest free overdraft easily.

katmad99

thanks Estaves, it's nice to know what should happen and what i can do do if things go wrong!