What is the best account for a graduate?

Jeremy asks: I have just started working and I’m looking at opening a bank account.

There seem to be plenty of options, but I’m leaning towards Capitec because I appreciate their simple, transparent approach. Is there anything about Capitec one should be wary of?

Maya replies: Capitec is a good option but on the downside it does not provide full banking solutions.
It does not offer a credit card, car finance and home loans so you would need to have a relationship with another bank.

A well-managed credit card can help you to build up a credit record for when you need to borrow to buy a car or home.

You also need to consider the number of transactions you undertake as Capitec is pay as you use. So if you do a relatively low number of transactions it can work out cheaper, but if you are spending more than R70 a month then you may be better off with an unlimited package from FNB or Nedbank.

Capitec’s ATM’s are not widely available so drawing cash can get expensive if you don’t use the cash back option.

The other banks do offer value add services which they claim offset the banking fees, but you need to decide if those value adds are something you need.

Banking tips for graduates

Once you have graduated and start working, your banking needs change and you need an account that can provide a higher level of transactions.

As a student you would have opted for a pay-as-you use bank account as your transactional needs were limited. Once you start working your transactional needs increase as you sign up for debit orders and generally have more bills to pay.

You may find that your student account becomes too expensive or does not have the full functionality that you need.

It’s not really advisable to operate more than one account at this stage, as more accounts equal more bank charges, so rather upgrade and close your student account.

If you’d like to start saving, you can link a savings account to a transactional account, for example, and you don’t need to pay in a set amount each month.

The smartest thing you can do is keep banking costs down, operate one account that allows you to consolidate, and maintain a good payment record so your bank will be keen to lend down the line, when you’d like to buy a car or a home.

You can cut banking costs by:

  • Selecting the right bank account for your needs. Your bank should help you with this choice

  • Understanding what transactions are included in your monthly fee and don’t go beyond that limit

  • Not drawing cash too frequently at ATM’s. Use your debit card where possible and work out a weekly budget so you don’t draw more than once

Accounts for graduates
Which bank you opt for now is an important decision because this is the bank you are most likely going to continue to bank with as your career develops. It is worth doing some research. What are the costs, what benefits or facilities do they provide and is this a bank you can build a relationship with?

Capitec Global One account is the only account they offer but it would meet your basic transactional needs. It does not offer a credit card but it has great savings accounts with high interest rates which you can link to your transactional account

FNB Life Start Student Account Once you graduate and upgrade your account to an FNB Gold account you receive up to 2% off student loan repayment plus a free linked savings pocket.

Nedbank Dezign Current Account for full-time students between 16 to 26 years of age. No minimum salary required and no opening deposit required. For R13.50 monthly fee you get a range of transactions for free including internet and telephone banking, Nedbank ATM withdrawals, debit orders and debit card for purchases at stores.

Nedbank also offers a credit card designed especially for students to give you the opportunity to build your credit record with Nedbank. There are low credit lines to teach you how to manage your money whilst having access to credit. If you pay off your credit card in full at the end of each month you will build credit record without getting into debt.

ABSA Gold Graduate Current Account for graduates between the ages of 18 and 28 and a monthly income of R3 000 and costs R30 a month.

Standard Bank Prestige is for graduates with a professional degree (lawyer, doctor, chartered accountant, engineer or architect). Costs vary depending on your option

Standard Bank Elite: If you have a three-year degree or diploma and earn a minimum gross monthly salary of R5 000. Costs vary depending on your pricing option

Standard Bank Achiever: If you have a degree, diploma or certificate (less than three years) and earn a minimum gross monthly salary of R3 000. Costs vary depending on your pricing option.

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