HSBC finishes interest free student overdrafts

The National Union of Students (NUS) is advising those with graduate student accounts with HSBC to consider moving their accounts to another bank.

It comes after the HSBC announced that from this month graduate bank accounts would no longer be eligible for free overdrafts to £1500, as previously with their accounts.

Any student who has taken full advantage of the previously free £1500 free overdraft facility could now be faced with interest payments of £150 a year. Alternatively, HSBC offers a “premium” service for £140 a year to have access to a similar interest-free overdraft.

It marks a continuing direction with high street banks to introduce charges for normal banking services, not least since recent challenges over potentially illegal banking fees means that UK banks are losing hundreds of millions of pounds each, which they are keen to recover through more transparent banking charges.

In the meantime, anyone who believes they may be subject to extra charges on their bank accounts should always consider shopping around, as while the general expectation is that free banking in the UK is in the process of ending, some banks are especially keen to retain customers for the other financial products and services they may require in future.

This is especially as uncertainty in the debt markets means that any bank that treats it’s customers too much for granted could find themselves struggling later on to convince people to use their services.

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