THE TIME OF THEIR LIVES; GOING TO COLLEGE OR UNIVERSITY IS EXCITING AND FUN, BUT STUDENTS NEED TO GET SERIOUS ABOUT SORTING OUT FINANCE; (as Long as They () Don't Ignore All That Stuff about Money)

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Byline: JO THORNHILL

ANNA Ross is on the brink of a whole new adventure. If she gets the A-level grade she needs on Thursday, she will be off to college next month to study fashion. Anna is excited by the prospect of being a student, living in London and, at 18, being independent for the first time.

There is just one thing worrying her - money, or more precisely the lack of it.

At this time of year most banks have a big push on their student accounts. Abbey has a [pounds sterling]50 cash gift and HSBC offers free travel insurance and discounts on music and laptops while NatWest provides a free five-year 16-25 Railcard, for example, which cuts one third off all rail travel.

Banks know that young people who open an account at 18 usually become lifelong customers because few can be bothered to switch later in life.

But Kevin Mountford, head of banking at the comparison website moneysupermarket.com, urges potential students to look beyond initial perks to focus on the all-important overdraft deals (see table).

'All sorts of incentives and freebies get waved under students' noses,' he says. 'These are useful, but they shouldn't be the reason to choose an account.

Anna, from Plymouth, hopes to take a degree course at the London College of Fashion if she gets at least a C in either Art or Textiles A-levels. She also sat Business Studies A-level.

She has banked with Lloyds TSB since she opened a young saver's account at the age of 14. She looked at the student accounts of other major banks, but Anna, who is working in an ice cream parlour during the summer to save cash, stayed with Lloyds TSB because of its good overdraft deal and because it uses mobile phone banking.

'The overdraft is the big day-to-day worry for most students,' says Anna. 'My parents will help me out during my studies, but I will also have to borrow. I like the fact that Lloyds TSB sends a text message if you get close to your agreed overdraft limit.' Anna will be able to borrow up to [pounds sterling]1,500 on an agreed interest-free overdraft during her course. If she needs to borrow more, she should consider other sources of credit, including the Government-backed Student Loans Company (see below, right).

Many students graduating this summer will have debts in excess of [pounds sterling]21,000 if they have taken the full loan for fees and maintenance during their three years of study. But the overdraft is likely to be the most pressing debt, with some banks demanding immediate repayment.

'Too many students stick with the account they opened when they were 18 or younger,' says David Black of financial data compiler Defaqto. 'But with strong competition in current accounts, it could pay to switch.'

Some banks will offer add-on perks and rewards to switchers, but it is usually the overdraft facility that is the most important feature for graduates. …