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HSBC announces changes to graduate bank account
Friday, 22 June 2007
Life after graduation
Leading high street bank HSBC has announced changes to its graduate bank account offer, with interest-free overdrafts set to be scrapped.
Normally, lenders have allowed new graduates up to three years with an interest-free overdraft facility still intact, but now those new leavers with an HSBC graduate bank account will face an extra ten per cent interest charge on their overdraft.
The new plans, to be launched on the bank's graduate bank accounts from August this year, will mean that graduates wanting to retain an interest-free overdraft facility will have to sign up for a Graduate Plus account, paying a monthly charge of £9.95 to retain the service for three years.
Officials from the bank say the changes are designed to give new graduates a clearer idea of the added costs associated with borrowing as they launch on to their career paths.
"The new service
softens the blow of realising the costs associated with borrowing, and graduates will be more inclined to take action if they realise they are paying for something," commented HSBC spokeswoman Karen Garner.
"We obviously appreciate there is a risk that some students won't bank with us anymore," she added.
The move has attracted some criticism from other sources, with an NUS spokeswoman saying it is "pretty alarming to think students are going to be hit with a big charge".