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Beware banks bearing gifts! Students are urged to think long-term over accounts.

Byline: By Catherine Hendrick

IT used to be rail cards and cinema passes but now banks are offering 'free' webcams and iPods in a bid to sign up students heading off to university.

But experts are urging undergraduates not to be swayed by hi-tech 'freebies' when it comes to choosing a student account.

If you sign up to the one offering the best long-term deal, you could save enough money to buy a webcam or iPod yourself and still have cash to spare.

Michelle Slade, from finance website Moneyfacts.co.uk, explains: "However tempting these "goodies" may be, it's important students look at account features such as interest-free overdrafts and unauthorised overdraft rates.

"They should also think about the services available. Most providers offer a specialist advice service, with dedicated advisers trained in managing student and graduate finances, so it may be worth considering a bank with a branch local to their university."

With the average student in the West Midlands facing a pounds 15,000 financial hangover from their studies as well as a few alcohol induced ones we take a look at what's on offer with the help of Moneyfacts.co.ukbelow.

Interest Free limit

An interest free limit of up to pounds 2,500 - what more could a student need? Well be warned - some aren't guaranteed and once your application's processed you may be offered a much lower figure.

Authorised Overdraft

In times of need students can often agree an extension to their original overdraft limit. But, with the exceptions of NatWest and Royal Bank of Scotland, you'll be charged interest on this borrowing, which can range from 7.2 per cent to 9.9 per cent.

Unauthorised Overdraft

Most students have done it - blown an extra few pounds and gone over their overdraft limit. But it can be a costly business.

HSBC account holders seem to get the fairest deal in this instance, according to Moneyfacts.co.uk, not applying unauthorised fees and charging their standard rate of interest (15.9 per cent), compared with fees of pounds 30 per day (max pounds 90 pm) with Lloyds TSB, or interest of a whopping 32.92 per cent at the Co-operative Bank.

Credit Interest

Some accounts pay more than 3 per cent interest on credit balances, but with the majority of students more likely to turn up for a 9am lecture than have a large bank balance it's unlikely to be worth it.
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Title Annotation:Sport
Publication:Birmingham Mail (England)
Date:Aug 21, 2006
Words:406
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