Student banking after graduation

Your student bank account will usually change after you finish university. Depending on your bank and if you’re eligible, you could move to a graduate account or a standard current account.

This might not happen as soon as you graduate. So check your bank’s terms to find out when your student account ends and what happens next.

When your student account changes, you’ll likely lose the perks you had. If you have an interest-free arranged overdraft, the terms could change too. We’ll explain what to look out for below.

If you've repeated a year, extended your course, started a postgraduate course or left university early, let your bank know as soon as possible. That way any changes to your account reflect your circumstances.

A graduate account can help you manage the move from student life to working life. It’s usually the same as a regular current account, but it may let you keep an interest-free arranged overdraft for a set time after you finish university.

This can be useful while you’re looking for work, waiting for your first payday or covering costs like moving home. It gives you more time to pay back what you owe.

Graduate accounts vary between banks, including who can open one, how much you can borrow and how long the account lasts. Check the terms of your account, so you know when your overdraft limit will reduce and what happens when your graduate account ends.

If your bank does not offer a graduate account, you may move to a standard current account instead.

If you had an interest-free arranged overdraft with your student account, you might not have to start paying interest on what you’ve borrowed as soon as you graduate. This will depend on your bank and account.

After you graduate, your arranged overdraft limit or the amount you can borrow interest-free could reduce over time. For example, they might get smaller each year until they end completely.

If your overdraft balance is higher than your interest-free limit, you could be charged interest on the amount above that limit.

Below is an example of how this could work. We’ve included what could happen if you graduated overdrawn by £2,500 and didn’t pay any of it back after graduating.

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In the example we’ve shown above, paying back £750 during your first year after university would bring your balance in line with the new £1,750 interest-free limit. If you didn’t pay anything back, you could start paying interest on that £750, depending on your account terms.

Before your limit starts to change, check:

• how much of your arranged overdraft you’re using
• when your interest-free limit will reduce
• what your new limit will be.

If you owe more than your new limit, you might need to pay money into your account to bring your balance back within your arranged overdraft.

Knowing when your limit will change can help you plan ahead. Look at what you owe and how much you could realistically pay back each month, while still covering your essential costs.

If you have our FlexGraduate account and you’re struggling to repay your overdraft after graduation, find out how we can help.

Your first salary can feel like a big reset after stretching student finance, part-time work and an overdraft.

Before you start making plans for payday, check how much will actually reach your account. Your take-home pay will usually be lower than your salary after deductions like tax, National Insurance and workplace pension contributions.

Then think about what you’ll need each month for:

• essentials, like rent, bills and travel
• everyday spending
• paying back anything you’ve borrowed
• savings, if you can afford to put some money aside.

If your salary is paid into an account that’s overdrawn, it could bring your balance back into credit or reduce the amount you owe. This will depend on how much you’re overdrawn by and how much you’re paid.

If you’re still using an arranged overdraft, think about how you could gradually rely on it less before your interest-free limit starts to change or comes to an end.

And remember, your first payday does not need to mean having your finances completely figured out. Starting with a simple plan can make your money easier to manage from month to month.

If you need help budgeting your first paycheque, read our budget guide.

Building your credit history takes time, but there are some simple things you can do after university to get started.

You can:

• make payments on time
• stay within any agreed borrowing limits
• keep your address and other personal details up to date
• register to vote at your current address
• check your credit report regularly and correct any mistakes.

If you’re using an arranged overdraft, remember that it’s still borrowed money. Gradually paying back what you owe can also help you prepare for your interest-free limit reducing or ending.

Your credit history can be one of the things lenders and other companies look at when deciding whether to offer you credit or other financial products. Building good money habits now can put you in a stronger position if you want to borrow in the future.

If you have our FlexGraduate account, call us to talk through your options or read our support articles.