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Living: Dazzling freebies as banks tempt students; THE start of the university year is just weeks away and banks are now queuing up to lure new account holders with a baffling array of deals. CAMPBELL DOCHERTY and ROBERT LIEBMAN examine what's on offer.

BANK BUMPF... Josie Dallow, aged 18, of Worcester College with just some of the information available

THERE was a time when the best freebies you could expect from a student account were a couple of free pizzas and half-price vouchers for the cinema.

Things have certainly changed today with banks and building societies throwing everything from free CD players and mobile phones to discounted PCs at undergraduates to persuade them to sign up.

Students should beware, however. The incentives may well be enticing, but it is more helpful in the long term to get an account with good interest rates and low charges.

One thing new students should consider are the overdraft facilities provided by the bank.

Student life being what it is, no matter how determined you are to remain resolutely careful and pinch the pennies, the chances are you will go into the red at some point.

The most generous bank is Lloyds TSB which will allow you to borrow up to pounds 1,500 a year interest-free. If your course goes into fourth or fifth years, that amount increases to pounds 2,000.

When choosing your account, remember to ask about the proximity of a branch and free ATM machines. Also, find out about charges to use other banks' cash machines.

Ask about late-night and Saturday opening times, specialist student advisors at your local branch.

A full list of student bank accounts is available on the National Association for Managers of Student Services in Colleges website at www.namss.org.uk

Remember...

Banks and building societies generally do not give free samples.

In return for the gift you receive, you will have to give something back to the bank - and you may end up paying through the nose later via your overdraft

Choosing the right bank from the outset can mean the difference of hundreds, perhaps thousands, of pounds.

In the long run it is more important to find out how amenable your bank will be when times are tough at the end of term.

'Getting into debt is not generally a great thing.'

That's the common sense advice from Chris Spink of the trendily ironic Motley Fool financial website.

'You're paying lenders, such as banks or credit card companies great sums of money for the privilege.

'When you're a student it's almost impossible to make ends meet without borrowing a little.

'Student loans are the cheapest, and consequently the best, form of borrowing around.

'If you really need to borrow more, then an interest-free overdraft may be the best bet. Just make sure it really is 'interest-free'. Don't be afraid to ask for exact details before agreeing to anything.

'Your bank wants your custom. Be very careful with credit cards. Interest rates on these can be very high and work out expensively in the long run.'

After you make your major banking decisions, one last question usually remains: what to do with the lump sum loan you received?

Find it a home where it accumulates lots of interest, and where you can live with the other small-print conditions.

Interest if Multi-function cardInterest -freeAuthorisedUnauthorised

in creditDebitchequeoverdraftOverdraftOverdraft

0.1%Deltapounds 100pounds 1,000-pounds 1,80015.4%29.9%

Abbey National

Incentives: Internet and telephone banking, free mobile phone with discounted bills or pounds 40 cash.

3.25%Switchpounds 100pounds 1,200 - pounds 2,0005%22.5%

Bank of Scotland

Incentives: Internet and telephone banking, credit card (pounds 350 maximum credit), commission-free travellers cheques and currency, specialist advice service.

0.1%Deltapounds 50pounds 1,2508.9%29.8%

Barclays Bank

Incentives: Internet and telephone banking, pounds 20 vouchers and 15% Waterstones/HMV discount, credit card (pounds 350 maximum credit), commission-free travellers cheques and currency.

3.75%Switchpounds 100none19.56%34.49%

Clydesdale Bank

Incentives: Telephone banking, discounted PCs via IBM, commission-free travellers cheques and currency, specialist advice service.

nilVisapounds 100pounds 800-pounds 2,0009.79%32.92%

The Co-Operative Bank

Incentives: Internet and telephone banking, credit card (negotiable credit limit).

2%Switchpounds 100pounds 500-pounds 10008%24.9%

Halifax

Incentives: Internet and telephone banking, package holiday discounts, commission-free travellers cheques and currency.

0.1%Switchpounds 100pounds 750-pounds 1,50016.9%29.5%

HSBC

Incentives: Internet and telephone banking, free four-year Young Person's Railcard or pounds 50 cash, credit card (pounds 500 maximum credit), youth travel insurance service, specialist advice service

nilDeltapounds 100pounds 1,500-pounds 2,0007.4%26.80%

Lloyds TSB

Incentives: Internet and telephone banking, credit card (negotiable credit limit), commission-free travellers cheques and currency, pounds 40 cash if parents are already customers.

0.1%Switch pounds 50Negotiablenil17.81%

NatWest

Incentives: Telephone and PC banking, free portable CD player or pounds 35 cash, credit card (pounds 500 maximum credit), commission-free travellers cheques and currency, specialist advice service.

3%Switchpounds 100pounds 1,000-pounds 2,0003%-6%29.84%

Royal Bank of Scotland

Incentives: Internet and telephone banking, discounted travel, travel insurance, minimum 20% HMV discount, two for one entry at over 350 nightclubs, 25% discount on concert tickets, credit card (pounds 500 maximum credit), commission-free travellers cheques and currency.

3.25%Switchpounds 100none7.23%-9.38%31.37%

Yorkshire Bank

Incentives: Telephone banking, discounted PCs via IBM, credit card (pounds 500 maximum credit).
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Author:Docherty, Campbell; Liebman, Robert
Publication:Sunday Mercury (Birmingham, England)
Date:Sep 17, 2000
Words:862
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