Best graduate bank accounts: Top 7 UK picks

Due to graduate from university soon? You’re already likely to be making plans for your future, and this includes how you’ll manage your money post-graduation.

Switching from a student account to a graduate account could give you benefits for years after you leave university, including a 0% interest overdraft.

But which are the best graduate bank accounts in the UK? Read on for a full comparison, including features, overdraft perks and any fees you need to know about.

We’ll also show you an alternative to a bank account, ideal for international students and gap year travellers in particular. Open a Wise account and you can conveniently manage your money in 40+ currencies for low, transparent fees* and great mid-market exchange rates. It’s not a graduate bank account but offers some similar features to a bank account.

Learn more about the Wise account 💰

Table of contents

What is a graduate bank account? Advantages and disadvantages of graduate bank accounts Advantages: Disadvantages: How to pick the best graduate bank account? Quick comparison of the best graduate bank accounts Top 7 picks for the best graduate bank accounts in the UK Santander Edge Grad Current Account HSBC Graduate Bank Account TSB Graduate Bank Account NatWest/RBS Graduate Account Lloyds Graduate Account Nationwide FlexGraduate Barclays Higher Education Account Wise – An international alternative to a bank account

What is a graduate bank account?

Graduate bank accounts are designed for people who’ve left university, and want to make the transition from a student account. You can of course open a regular current account if you want, but a graduate account offers more benefits for recently graduated students.

The main feature of this account is usually an interest-free overdraft. This is designed to help you pay off any student debt you’ve accrued during your time at university, before it starts gaining interest.

In most cases, the maximum interest-free overdraft will reduce every year - the aim being to wean you off using your overdraft.

While it varies between UK banks, graduate accounts usually offer preferential terms for up to 3 years after graduating.

Advantages and disadvantages of graduate bank accounts

Here’s a quick look at the pros and cons of graduate bank accounts.

Advantages:

• Interest-free overdraft, to help you gradually clear debt
• Some graduate accounts pay interest
• You may still be able to open a graduate account a year or so after you’ve graduated
• Some accounts offer discounts and other perks
• You can often open an account online.

Disadvantages:

• You can often only switch to a graduate account if you already had the bank’s student account, which can limit your options
• The interest charged for going over your overdraft limit can be very high
• Credit checks are carried out for overdrafts, so you may not qualify for the full amount if you have a poor credit score.

💡 Read more: Best online bank accounts in the UK

How to pick the best graduate bank account?

If you have student debt, you’ll be looking for a graduate account with the longest interest-free overdraft period.

But if you have spare cash, you might want to take a different approach and go for an account which pays the highest interest rate on balances.

You might also want to check your credit report before you apply. If it isn’t looking too healthy, you may not be accepted for the overdraft on many accounts. In this case, you might want to search for graduate accounts that offer overdrafts not based on your credit rating.

Quick comparison of the best graduate bank accounts

Here’s your at-a-glance graduate bank account comparison, covering all of the main options available in the UK right now:

Account	Opening/monthly fee	Interest-free overdraft	Rate above interest-free	Best feature
Santander Edge Grad Current Account¹	None	Up to £2,000	39.94% EAR (variable)	Santander Boosts cashback scheme
HSBC Graduate Bank Account²	None	Up to £3,000	39.9% EAR (variable)	Generous interest-free overdraft limit
TSB Graduate Bank Account³	None	Up to £2,000	39.9% EAR (variable)⁴	Interest-free overdraft lasts 3 years
NatWest/RBS Graduate Account⁵	None	Up to £3,250	39.49% APR (variable)	Generous interest-free overdraft limit
Lloyds Graduate Account⁶	None	Up to £2,000	39.9% EAR (variable)⁷	Interest paid on up to £5,000
Nationwide FlexGraduate	None	Up to £1,500 - £2,500 (based on course length)⁸	N/A	No charges to use your card abroad
Barclays Higher Education Account⁹	None	Up to £1,500	N/A	Personalised debit card

Top 7 picks for the best graduate bank accounts in the UK

Now, let’s run through some of your options in a little more detail. Take a look below for details on the features, fees and other details of the best graduate accounts available in the UK right now.

Santander Edge Grad Current Account

The Santander Edge Grad Current Account is only available for people who have held the Santander Edge Student current account or 1I2I3 Postgraduate Current Account. You’ll be moved onto it automatically, but you may be asked for proof that you’ve graduated.¹

Key features of the account include:

• No monthly fee
• Arranged overdraft limit of £2,000.
• 0% interest on up to £2,000 in the first year, and up to £1,000 in the second year.
• The interest rate if you exceed your overdraft limit is 39.94% EAR (variable) representative.
• Access to Santander Boosts cashback scheme.

You can have this account for up to 2 years, after which time you’ll be automatically moved to a standard current account. There’s no interest paid on credit balances.

💡 Read more: How to open a Santander account online?

HSBC Graduate Bank Account

The HSBC Graduate Account is for people aged 18+ who’ve graduated within the last two years.²

Features include:²

• No monthly fee.
• Interest-free overdraft of up to £3,000 in the first year, dropping to £2,000 in the second year.
• The interest rate if you exceed your overdraft limit is 39.9% EAR (variable).
• Access to HSBC’s home&Away offers and discounts.
• Access to HSBC savings accounts.
• Handy app features such as instant notifications and spending insights.

There’s no interest paid on credit balances.²

Interested in other accounts? Here’s how to open an HSBC current account.

TSB Graduate Bank Account

If you’re a UK resident aged 18 or over and you graduated within the last 3 years, you could be eligible to open a TSB Graduate Bank Account.³

Features of the account include:³

• No monthly fee.
• Interest-free overdraft of up to £2,000 for 3 years - the limit doesn’t drop year by year.
• The interest rate if you exceed your overdraft limit is 39.9% APR representative (variable).⁴
• Access to a Graduate Loan (on application) of between £5,000 and £10,000, with an interest rate of 12.9% APR representative.
• Handy app features such as Save the Pennies, which rounds up card payments to the nearest pound and sends it to a Savings Pot.

You can have the account for 3 years, after which time you’ll be automatically moved to a standard TSB current account.

NatWest/RBS Graduate Account

Part of the same banking group, both NatWest and RBS have the same offer for graduates.

If you already have a student account with either bank, you’ll be automatically switched to a Graduate Account when you graduate. You can’t open one in other circumstances, such as if you have a student account with a different bank.⁵

Features include:⁵

• No monthly fee.
• Interest-free overdraft of up to £3,250 for the first year, £2,250 for the second year and £1,250 for the third year.
• The interest rate if you exceed your overdraft limit is 39.49% APR (variable) representative.
• Dining discounts with tastecard.
• Handy app features such as Split Bill and spending notifications.

You can have the account for 3 years, before being automatically moved to the NatWest/RBS Select Account.

💡 Read more: How to open a NatWest bank account?

Lloyds Graduate Account

The Lloyds Graduate Account is only available to people who already have a Lloyds Bank Student Current Account. Your account will be automatically converted when you graduate.⁶

Features include:⁶

• No monthly fee.
• Interest-free overdraft of up to £2,000 in the first year, £1,500 in the second year and £1,000 in the third year.
• The interest rate if you exceed your overdraft limit is 39.9% EAR (variable) representative.⁷
• Credit interest of 2.00% AER (1.98% gross) variable on balances between £1 and £5,000.
• Access to Lloyds Bank Everyday Offers discount scheme.

You can have the account for three years, after which time it’ll be automatically converted to a Lloyds Bank Classic Account.

💡 Read more: How to open a Lloyds bank account?

Nationwide FlexGraduate

If you have a Nationwide FlexStudent Account, it’ll automatically be switched over to a FlexGraduate Account once your course is over. You won’t be able to apply for the graduate account if you bank elsewhere, or haven’t had Nationwide’s student account.⁸

Features include:

• No monthly fees.
• Interest-free overdraft of up to £2,500 for the first year, £1,750 for the second year and £1,000 for the third year, for people graduating from 3 year courses. If you were on a 2 year course, your overdraft limit will be £1,500 for the first year and £1,000 for the second year.⁸
• No option to exceed your arranged overdraft, so no interest rates to worry about.
• Access to preferential savings rates.
• No charges to use your debit card abroad.

You can have the account for 2 or 3 years, depending on how long your course was.

💡 Read more: How to open a Nationwide bank account?

Barclays Higher Education Account

Last but not least, we have the Barclays Higher Education Account. It’s designed for graduates and Higher Apprentices (Level 7+) and you can apply even if you don’t already bank with Barclays.⁹

If you already have it’s student account, you’ll be automatically switched over when you graduate.

Features of the Barclays Higher Education Account include:⁹

• No monthly fees.
• Interest-free arranged overdraft up to £1,500 for 3 years.
• No option to exceed your arranged overdraft, so no interest rates to worry about.
• Optional Blue Rewards scheme to earn monthly rewards (monthly fee applies).
• Personalised debit card.
• Option to buy packs for extras such as travel insurance.

You can have the account for three years. There’s no interest on credit balances.

Wise – An international alternative to a bank account

If you’re planning to further your studies abroad or do some travelling now that you’ve graduated and want to make your money go further then check out the Wise account from the money services provider Wise.

Open a Wise account online and you can start managing your money in 40+ currencies (including GBP). It’s not a bank account but offers many similar features.

Here are the main benefits for using Wise:
Fast and easy setup with no physical paperwork Low, upfront, transparent fees* Mid-market exchange rate for currency conversions 24/7 Fully trackable transfers Fast transfer times Two-factor authentication and real-time notifications Dedicated support for large transfers

You can also get a Wise card for a one-time cost of just £7 and use it to spend all over the world in 150+ countries, including the UK.

This clever debit card automatically converts your pounds to the local currency at mid-market exchange rates whenever you spend. There are no foreign transaction fees, only a tiny conversion fee* - or it’s free if you already have the foreign currency in your Wise account.

Sign up with Wise today 💰

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Sources used:

1. Santander - Santander Edge Grad current account - Key Facts Document
2. HSBC - Graduate Bank Account
3. TSB - Graduate Bank Account
4. TSB - Overdrafts
5. NatWest - Graduate Account
6. Lloyds Bank - Student Current Account
7. Lloyds Bank - Overdraft cost calculator
8. Nationwide - Arranged overdrafts for FlexStudent and FlexGraduate bank accounts
9. Barclays - Higher Education Account

Sources last checked on date: 02-Sep-2024