Regulator warns students over banking charges

STUDENTS have been warned to look out for big variations in interest rates and other banking charges by the Financial Regulator.

While most transactions on student accounts are free and banks may offer various incentives to sign up with them, a survey of five banks carried out by the regulator shows that some charges can vary quite a lot between different financial institutions.

For example, the charges range from €4.44 to €12.70 each time a standing order, direct debit or cheque goes unpaid, which can happen if there is not enough money in the account to match these payments often used for bills or for rent.

The other main warning to students relates to loans, particularly the charges incurred on late or missed repayments.

Financial Regulator head of consumer information Sharon Donnery said various charges can add up quickly so students should monitor their account.

“Try to budget as much as possible to manage your money and avoid any additional charges. Borrowing is sometimes essential when you are on a student budget but by setting yourself a budget and sticking to it, you might reduce the chances that you will need to borrow money during the college year,” she said.

“If you do need to borrow, make sure you choose the option that suits you the best. And remember, although you may have heard it before, borrowing on your credit card can be very expensive,” Ms Donnery said.

The advice to those considering taking out a loan is to have a clear plan of how long it will be needed and when it will be repaid.

“If you miss repayments, there may be extra charges and you could damage your credit rating. Overdrafts are another option if you need to borrow but remember to keep within the agreed limit,” Ms Donnery said.

The full survey is available on the regulator’s website — www.ifsra.ie — and shows transaction charges, service charges and interest rates on student accounts offered by AIB, Bank of Ireland, National Irish Bank, Permanent tsb and Ulster Bank.

Also available is a Money Tips for Students fact sheet, giving information on how to open a student account, particularly for international students. It also advises on how to budget properly, by setting expenses such as rent, bills, food, books and other college costs against any income.

nCopies of the student current account cost survey and “Money Tips for Students” are available by phoning the consumer help-line on lo-call 1890 77 77 77, visiting www.itsyourmoney.ie or calling to the Consumer Information Centre at College Green, Dublin 2.