Each have a special student package usually based around a current account

Each have a special student package, usually based around a current account. Additional services such as cheap travel insurance are often thrown in.HSBC, for example, offers students the choice of either a free four-year railcard – which costs £72 – or £50 cash. NatWest has a free “student starter kit”, consisting of a kettle, toaster and radio alarm clock, and Lloyds TSB will give you a £19, three-year National Express card, plus travel vouchers.Most of the big banks offer a substantial interest-free overdraft facility, which for many students is the most important factor. In some cases the interest-free limit is the same for each year, with others it rises each year for the duration of the course. Lloyds TSB offers one of the biggest interest-free overdrafts, particularly for students on longer courses, with a £1,500 limit in years one to three, rising to £2,000 in years four and five. With HSBC you can have an interest-free overdraft in your first year of £1,000. This goes up to £1,250 in the second year and £1,500 in your third year.

At Barclays the interest-free limit is a maximum £1,250.For borrowing above the interest-free overdraft limit, rates can vary widely. With NatWest, any agreed overdraft above the limit will also be interest-free. Others with low rates include HSBC which charges 1 per cent above the base rate, which is 4 per cent.But while getting the biggest overdraft available may seem a good idea, you can be easily stung by high charges should you stray over the limit. Abbey National, for example, will charge you 27 per cent if you overstep the mark. There is also a £15-a-month fee plus an additional £10 charge for each transaction paid while you are overdrawn without permission.Clydesdale Bank will charge 34.49 per cent.

This applies not just to the amount in excess, but to the entire amount by which you have overdrawn, meaning debts can quickly mount.Having easy access to funds will also be important. This is not just the proximity of cash machines and branches to the campus, but also what other channels are available to you keep abreast of your financial position. Most banks have an internet service where you can keep watch on your account 24 hours a day. Some operate phone systems where you can pay bills, make payments, switch money between accounts and check balances.Keeping in touch with your bank and not burying your head in the sand if debts do start to mount up will be very important.

This will help stop money problems spiralling out of control. Tim Edwards, customer services manager at HSBC’s Aber-ystwyth’s branch, says: “The key is to work within your overdraft limit and make use of all the delivery channels your bank has to offer. Keep an eye on your balance, and the most important thing is to speak to your bank adviser regularly Bring up concerns before you get in trouble. Ask for help and advice.”Barclays and Lloyds recommend having student loans paid in to a savings account, then transferring funds to current accounts every month.Some high street banks offer cheap rates on insurance to cover possessions, which are increasingly costly to replace when students bring hi-fis, computers and mobile phones with them to university.