Best graduate bank accounts 2023
Get to grips with graduate banking and you'll be better off for up to three years after uni. Avoid the fees and switch to a better deal – here's how!
From 0% overdrafts to freebie incentives, student bank accounts offer some great deals.
Graduation doesn't have to mean suddenly missing out on all the bank account perks, though. We'll show you how to make the most of student banking benefits by getting an account that's specifically catered for recent graduates.
You can be eligible for a graduate bank account for up to three years after your course ends.
Compare graduate bank accounts
7 tips for choosing a graduate bank account
Here's how to find the best graduate bank account for you:
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Switch bank accounts
When it comes to banks, loyalty rarely pays off.
Staying with the same bank for a long time generally doesn't come with any extra perks. These are usually reserved for new customers who enjoy introductory rates as an incentive for switching.
And thanks to the Current Account Switch Service, switching to the best graduate bank account has never been easier. Behind the scenes, all of your incomings and outgoings will be switched from one bank to another, meaning you don't have to handle any of that stuff (like updating Direct Debits) yourself.
We'd recommend regularly reviewing your bank account terms and rates, shopping around and switching to a better deal when possible. Switching your current account shouldn't affect your credit rating, so there's no reason not to do it. Just follow our simple steps on how to switch bank accounts.
Can you switch to a graduate bank account after graduating?
Good question! Unfortunately, though, there's not a clear yes or no answer for whether you can switch to a different graduate account. Some accounts can be switched to after graduation, but some can't. We clarify whether you can for each account in the table below.
If possible, use a bit of foresight and research graduate accounts before you leave uni. That way, you'll have a better chance of switching to a different account with more perks.
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Choose a longer-term 0% interest overdraft
If you've graduated in the red, your main aim should be to source the graduate account offering the longest 0% overdraft. But do what you can to avoid taking on more debt than you already have.
While the main aim of your student bank account was to allow you to borrow in order to get through your uni years, the purpose of a graduate account is to give you a few years to pay off what you owe before it starts gaining interest.
As such, try to choose the graduate bank account with the longest 0% overdraft available. This will give you more time to pay it all back.
It is possible to apply for a total overdraft that exceeds the 0% allowance. However, you'll have to pay interest on the portion over that allowance.
As graduate accounts are meant to be a free way to get out of your overdraft, we would strongly recommend you stay within your interest-free limits (and go for an account with the most generous offering, if that's what you're after).
Note that the two or three years of 0% overdraft that you'll be offered with your graduate bank account will be calculated from the date you graduate, not from when you set up your account. -
Choose a bank account that pays interest
If you find you tend to be good at budgeting and can stay out of your overdraft, you can really benefit from accounts that pay interest.
In this case, we'd recommend finding an account with a decent interest rate on a positive balance. This will essentially be a way to earn free money. It could potentially mean switching to a standard current account, not a graduate one.
Other incentives like cashback, payouts for switching banks and extra freebies are also worth looking into. But, don't let one-off freebies cloud your judgement too much.
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Check your credit rating before you apply
Before you make your decision on which account to go for, it's worth taking the time to check your credit rating.
Most of the 0% overdraft facilities you'll find in graduate accounts will be variable (e.g. "up to £3,000"). So, it's possible you won't qualify for the full amount, depending on how your credit score is looking.
Banks will use your banking history (past borrowing, income stream, etc.) to decide how large your 0% overdraft limit should be. If your credit rating isn't great, it's worth scoping out an account that offers a guaranteed overdraft amount that isn't based on your rating.
Alternatively, try a few steps to improve your credit rating.
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Budget to quickly clear your overdraft
Don't use the interest-free overdraft as a chance to spend more money. Your graduate account is your last chance to pay back what you already owe before you start paying interest on it.
It is possible to set up your graduate account a year after graduation. But, if you wait around, you'll enter into the second-year overdraft limit, which is often lower than the first year. These accounts are calculated from your graduation date.
Graduate account overdrafts decrease on a sliding scale for each year after you graduate. Depending on your account, you could see yours drop by up to £1,000 each year!
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Don't go over your overdraft limit
If you go over your arranged overdraft limit, you could be looking at additional charges for each transaction (whether the bank honours the payments or not).
It's expensive and makes your debt even harder to clear. So, avoid this as much as you possibly can. Plus, if you consistently mismanage your account, the bank may even reduce or remove some account features (including your overdraft).
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Graduate loans are different from Student Finance
You may be offered a bank loan as part of your grad package. But think carefully before grabbing the cash. Some banks even offer up to £25,000 to graduates, which is a lot of cash (and therefore a lot to pay back).
Commercial loans work quite differently from Maintenance Loans. For one, you may be expected to start repaying the money almost immediately. Unless you've got a guaranteed income, this could be more stressful than it's worth.
If you're considering a loan because you're already in debt, get free advice from StepChange Debt Charity first.
Best graduate 0% overdraft accounts
Graduate bank accounts 2023 |
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| Bank account | 0% overdraft | Interest beyond 0% overdraft | Switch as graduate? | Review | ||
|---|---|---|---|---|---|---|
Nationwide FlexGraduate |
Up to £3,000 |
N/A | No |
Full review |
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HSBC Graduate Bank Account |
Up to £3,000 |
39.9% EAR | Yes |
Full review |
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TSB Graduate Account |
Up to £2,000 |
39.9% EAR |
Yes |
Full review |
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Lloyds Graduate Account |
Up to £2,000 |
39.9% – 49.9% EAR | No |
Full review |
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Santander 123 Graduate Account |
Up to £2,000 |
39.94% EAR | No |
Full review |
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NatWest Graduate Account |
Up to £2,000* |
39.49% EAR | No |
Full review |
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RBS Graduate Account |
Up to £2,000* |
39.49% EAR | No |
Full review |
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Co-operative Student Account |
Up to £2,000 |
35.9% | No |
Full review |
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Barclays Higher Education |
Up to £1,500 |
N/A | Yes |
Full review |
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Halifax Student Current Account |
Up to £1,500 |
39.9% – 49.9% EAR | No |
Full review |
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| Figures and terms subject to change. Please check bank websites for details. | ||||||
* From 2nd October 2023, those who graduate in 2022 and 2023 can apply for up to £3,250.
You might not necessarily get the full overdraft allowance that’s advertised. The amount you receive is judged on a case-by-case basis.
The amount that you get interest-free may also drop each year and will be counted from the year you graduate, not from when you open the account.
Graduate bank account reviews
Nationwide FlexGraduate
Interest-free overdraft
- Year 1: up to £3,000
- Year 2: up to £2,500
- Year 3: up to £1,750.
The information on Nationwide’s website about the size of the interest-free overdraft is a bit confusing. Instead of describing it in terms of the maximum available each year, they say what the overdraft amount will reduce to at the end of each year after you graduate.
The accompanying graph just adds to the confusion. However, despite their confusing guidance – and what you might have read on other websites – we’ve had it confirmed by Nationwide themselves that the figures we quote are correct.
As with all the graduate accounts in this list, the maximum overdraft is not guaranteed for all applicants. Whether or not you’ll get it depends on your credit score.
Overdraft interest and fees
Nationwide’s FlexGraduate Account only offers you an overdraft as large as the 0% amount you’re entitled to. So, this means it’s impossible to have an arranged overdraft with a FlexGraduate account that isn’t interest-free.
In addition, as with all Nationwide accounts, FlexGraduate doesn’t come with the option of an unarranged overdraft.
However, you won’t be able to take any cash out or buy anything using your card until your balance is back within the agreed overdraft limit.
Our review
Although you can’t switch to a Nationwide FlexGraduate account after you’ve graduated, it’s still a good bank account for grads as it comes with such a sizeable maximum overdraft.
And remember, if you haven’t yet graduated (and are still a student), you can make the switch to Nationwide’s FlexStudent account and get transferred to the FlexGraduate account once you leave uni.
HSBC Graduate Bank Account
Interest-free overdraft
- Year 1: up to £3,000
- Year 2: up to £2,000.
After two years, HSBC will move you from a Graduate Bank Account to an Advance or standard bank account. Depending on your individual circumstances and how you’ve used your account, they may grant you an interest-free overdraft of up to £1,000 with this account.
Again, your eligibility for any amount of interest-free overdraft will depend on your credit score.
Overdraft interest and fees
Although the max interest-free overdraft available with the HSBC Graduate Bank Account is £3,000, it is possible to apply for an arranged overdraft that’s larger than this. But, any amount you apply for beyond the interest-free allowance that you’re granted will be charged interest at 39.9% EAR variable.
If you make a payment that takes you over your arranged overdraft allowance and into your unarranged overdraft, HSBC claims they’ll consider the request and, subject to status, complete it for you. If your request isn’t approved, HSBC will not charge you a fee for refusing the payment.
You will be charged interest on your unarranged overdraft (at a rate of 39.9% EAR), but this is capped at £20 per month.
Our review
The HSBC Graduate Bank Account is a great option, offering an interest-free overdraft of up to £3,000 for the first year after graduation. Plus, it’s possible to switch to the account as long as you’ve graduated from university within the last two years.
The overdraft is only available for two years, and it goes down to £2,000 in the second year after graduation.
TSB Graduate Account
Interest-free overdraft
- Year 1: up to £2,000
- Year 2: up to £2,000
- Year 3: up to £2,000.
As ever, your credit score will play a role in determining whether you get the full interest-free overdraft each year.
Overdraft interest and fees
The maximum overdraft available with a TSB Graduate Account is £2,000. Even if you’re not approved to use the full amount interest-free, you may still get a £2,000 overdraft. It’s just that some of it will be subject to interest. Any amount you borrow over your interest-free allowance will be charged interest at a rate of 39.9% EAR.
If you exceed your arranged overdraft limit with a TSB Graduate Account, the bank may agree to make the payment using an unarranged overdraft. You’ll be charged interest on the unarranged overdraft balance at a rate of 39.9% EAR.
Should TSB decline your request for an unarranged overdraft, the payment won’t go through and they’ll charge you £3 in the form of a ‘returned item fee’.
In any given month, TSB won’t charge you more than £30 in unarranged overdraft interest and returned item fees.
Our review
TBS’s unplanned overdraft fees are quite high. But, the option to switch to this account after uni makes it a good choice for anyone looking for an overdraft around the £2,000 mark. And, of course, the fact that the maximum overdraft allowance is £2,000 for all three years post-graduation is a big plus too.
Lloyds Graduate Account
Interest-free overdraft
- Year 1: up to £2,000
- Year 2: up to £1,500
- Year 3: up to £1,000.
Your credit score will play a role in determining whether you receive the full interest-free overdraft each year.
Overdraft interest and fees
Although there is a cap on the size of the interest-free overdraft you can get with a Lloyds Graduate Account, you may be able to get an arranged overdraft beyond the interest-free amount.
As long as you’re within your arranged overdraft, you’ll be charged interest on any money you borrow over the interest-free amount at a rate between 39.9% EAR – 49.9% EAR. The exact rate you’re charged will depend on your credit rating and how you’ve managed any accounts you have with Lloyds.
Lloyds may approve you for an unarranged overdraft should you require one, but this is by no means guaranteed. There are no fees or interest for using the unarranged overdraft on a Lloyds Graduate Account, nor are there fees if your request is rejected and the payment has to be returned.
Our review
You can’t switch to a Lloyds Graduate Account once you’ve already graduated. But, as long as you’re still a student, you can switch to the student account which then becomes a graduate account when you leave uni.
A bonus of the account is it lets you get up to 15% cashback at some top retailers, like Costa Coffee and Sainsbury’s.
The maximum interest-free overdraft available is about par for the course. However, if you’re planning to regularly shop at any of the retailers included in their cashback offer, the Lloyds Graduate Account could be a good choice for you.
Santander 123 Graduate Account
Interest-free overdraft
- Year 1: up to £2,000
- Year 2: up to £1,000.
Your credit score will play a role in determining whether or not you receive the full interest-free overdraft in each year.
Overdraft interest and fees
Santander’s graduate account comes with a maximum arranged overdraft of £2,000. In the first year after graduation, you’ll be entitled to use as much as the whole amount interest-free. But, in the second year, the majority of recent graduates will see their maximum 0% allowance drop to £1,000.
You’re still able to apply for a total overdraft of up to £2,000, but interest will be charged at a rate of 39.94% EAR on any amount you borrow over your interest-free allowance.
If you go into an unarranged overdraft with a Santander 123 Graduate Account, you won’t be charged a fee. However, Santander may decide to refuse you an unarranged overdraft and simply reject the payment instead.
Our review
The Santander 123 Graduate Account is only available for students currently on the 123 Student Account, meaning you can’t switch after graduation. The interest-free overdraft is also about average, in comparison to the other graduate accounts in our table.
However, the option to earn cashback with Santander Boosts is worth considering if you already have a Santander 123 Student Account and are thinking about switching before graduation.
NatWest Graduate Account
Interest-free overdraft
- Year 1: up to £2,000*
- Year 2: up to £1,000.
* From 2nd October 2023, those who graduate in 2022 and 2023 can apply for up to £3,250. As an overview of how the interest-free arranged overdraft will work, you’ll be able to get up to £3,250 in the first year after graduating, up to £2,250 in the second year and up to £1,250 in the third year.
As always, whether or not you receive the maximum interest-free overdraft will depend on your credit score.
Overdraft interest and fees
It is possible to apply for a total overdraft greater than the maximum interest-free allowance that comes with a NatWest Graduate Account. If you choose to do this and your application is accepted, any money you borrow beyond your 0% overdraft will be charged interest at a rate of 39.49%.
If needed, NatWest may grant you an unarranged overdraft depending on your individual financial circumstances. Should your request be approved, you will not be charged any interest for entering your unarranged overdraft.
However, if NatWest decides to block the payment (i.e. your request for an unarranged overdraft is blocked), you’ll be charged an ‘unpaid transaction fee’ of £2.15. A maximum of one fee per charging period is allowed, so you’ll never be charged more than £2.15 per month for entering your unarranged overdraft.
Our review
The interest-free overdraft attached to the NatWest Graduate Account only lasts for two years. It’s not awful, but clearly not as good as the three-year overdrafts you can get elsewhere.
Although you can no longer switch to a NatWest Graduate Account after graduation, if you had a NatWest Student Account, your perks should extend too. So, if you got a tastecard with your account, this will automatically renew annually for another two years, getting you a discount at thousands of restaurants across the UK.
RBS Graduate Account
Interest-free overdraft
- Year 1: up to £2,000*
- Year 2: up to £1,000.
* From 2nd October 2023, those who graduate in 2022 and 2023 can apply for up to £3,250. As an overview of how the interest-free arranged overdraft will work, you’ll be able to get up to £3,250 in the first year after graduating, up to £2,250 in the second year and up to £1,250 in the third year.
Whether or not you’re entitled to the full interest-free overdraft will depend on your credit rating.
Overdraft interest and fees
As with Natwest, if you have an RBS Graduate Account, you can apply for a total overdraft that exceeds your interest-free allowance. If your application is successful, you’ll be charged interest at a rate of 39.49% EAR on any money you borrow beyond your 0% overdraft.
If you try to make a payment but don’t have enough money left in your arranged overdraft, RBS may or may not grant you an unarranged overdraft, again based on your personal financial circumstances.
Should they give you an unarranged overdraft and allow the payment in question to go through, you won’t be charged any interest on this balance.
However, if the request is rejected and the payment is refused, you’ll be charged a £2.15 ‘unpaid transaction fee’. RBS will only charge you such a fee a maximum of once per billing period. So, you’ll never be charged more than £2.15 per month.
Our review
If you’re looking at the RBS Graduate Account and thinking it looks awfully familiar, you’re right to feel that way – it’s pretty much exactly the same as the NatWest Graduate Account (they’re part of the same banking group, so it makes sense).
As is the case with the NatWest equivalent, you can’t switch to an RBS Graduate Account after you’ve left uni. Fortunately, however, you’ll still get to carry over the perks (including your tastecard) that you enjoyed with your RBS Student Account.
So if you like the look of what the NatWest and RBS accounts are offering, and don’t know which to go for, we’d advise choosing whichever bank has more branches close to where you live and work – it’s pretty much the only difference between the two!
The Co-operative Student Bank Account
Interest-free overdraft
- Year 1: up to £2,000.
Whether or not you receive the full interest-free overdraft will depend on how good your credit score is.
Overdraft interest and fees
Anyone with a Co-operative Student Bank Account is able to apply for a total arranged overdraft that’s greater than the maximum interest-free allowance (£2,000). If accepted, and you end up borrowing money beyond your 0% overdraft, you’ll be charged interest on this amount at a rate of 35.9% EAR.
Co-op will consider all requests for an unarranged overdraft, should you need it. But, there’s no guarantee that they’ll grant you one. If they do, you’ll be charged interest on your unarranged overdraft balance at a rate of 35.9% EAR, capped at £60 per charging period.
If your request is rejected and the payment is refused, you will not be charged a fee.
Our review
The size of the interest-free overdraft is the same as most of the accounts on our list. However, the fact that it’s only available for one year after graduation is a disadvantage.
What’s more, the cap on unarranged fees is a lot higher than you’ll find with many of the other banks on this list. That’s definitely not ideal if you’re already struggling to stay in your arranged overdraft.
Although, one reason you may consider banking with The Co-operative Bank is that they are active in supporting important causes. For example, they’ve committed to becoming zero waste to landfill and have been supporting Manchester Pride for several years.
Barclays Higher Education
Interest-free overdraft
- Year 1: up to £1,500
- Year 2: up to £1,500
- Year 3: up to £1,500.
Whether or not you get the maximum overdraft each year will depend on your credit rating.
Overdraft interest and fees
It’s not possible to request an overdraft beyond the maximum interest-free allowance that comes with the Barclays Higher Education account. In other words, regardless of the size of your overdraft, it’ll always be interest-free.
What’s more, Barclays doesn’t offer an unarranged overdraft with its Higher Education account. Should you try to make a payment that takes you beyond your arranged overdraft, Barclays will usually refuse to release the money.
On the rare occasion that they’re unable to do this (Barclays gives the example of making an offline payment on a flight) and you enter an unarranged overdraft, no additional charges will be applied.
Our review
Barclays used to offer an interest-free overdraft of up to £3,000 with its Higher Education account – an amount that was available for three years after graduation. This has now halved to £1,500, but thankfully the maximum amount doesn’t decrease year on year.
Crucially, you can also switch to this account after graduation, as long as you can prove to Barclays that you graduated within the past three years.
Halifax Student Current Account
Interest-free overdraft
- Year 1: up to £1,500
- Year 2: up to £1,500
- Year 3: up to £1,500.
Whether or not you receive the full interest-free overdraft will depend on how good your credit score is.
Overdraft interest and fees
While the maximum interest-free overdraft available with the Halifax Student Current Account is £1,500, it is possible to apply for an overall arranged overdraft that exceeds this amount. If you borrow money from your arranged overdraft, outside of the 0% allowance, you’ll be charged interest at a rate between 39.9% EAR – 49.9% EAR.
Halifax may approve you for an unarranged overdraft if you need one, but there’s no guarantee. There are no fees or interest for using the unarranged overdraft attached to a Halifax Student Current Account, nor are there fees if your request is rejected and the payment has to be returned.
Our review
Much like the Co-operative bank account (above), as the name suggests, this one isn’t really a graduate account at all. Instead, you just get to keep your student bank account for three years after you graduate.
That means you get just one graduate year of your interest-free overdraft, which is by far the worst deal on this list. Although, you do get 0.1% AER interest on all in-credit balances. It’s not a huge amount, but it’s more than most of the other graduate accounts offer (i.e. nothing).
Switching to a bank account that fits your needs will make surviving life post-uni that much easier.
