Financial institutions vying for the attention of third-level students offera range of incentives but students must assess what their own needs are,writes Laura Slattery.

Students who received third-level places through the first round of CAO offers this week will soon be finding their way around their new college, locating important buildings such as the registration hall, the campus bookshop and the bar.

To pay the €670 registration fee, the €19 the average student spends on course materials every month and the monthly average of €76 the Union of Students of Ireland (USI) estimates they spend on alcohol, they may first have to take a trip to the nearest bank.

But discovering which bank offers students the most competitive deal is almost as difficult as deciphering the lecture timetables that get handed out at orientation.

Banks have traditionally tried to bribe students into opening accounts by shoving as many free CDs and mobile phone credit cards into their goodie bags as will fit.

This simply led to a rash of form-filling, as students took the swag and left for the comfort of another financial institution, or simply stuck with one they may have banked with as a second-level student.

So, once students get past the marketing offers, what should they look out for when opening a bank account?

Accessibility

Branch presence on campus may influence students' choice, but many will already have opened an account based on their parents' preference or proximity to their home.

Nevertheless, AIB has sole presence on campus at UCD and DCU, which may influence floating voters.

With access to the internet widespread at most third-level institutions, many students will want to take advantage of free 24-hour online and telephone banking for paying bills and checking all-important balances.

This service is now available at all of the main banks.

Free banking

AIB, Bank of Ireland, Ulster Bank and Permanent TSB all offer free transaction banking with no service charges to students.

National Irish Bank offers free banking to everyone under its Freebank accounts.

However, ATM cards for these accounts do not generally have standard logos such as Cirrus, Maestro or Plus attached. This means customers cannot use them to access money while on holiday abroad.

Discounted and interest-free loans

According to Bank of Ireland, one-fifth of students have some sort of borrowing, so it's worth seeking out the best rates.

Both AIB and Bank of Ireland give students interest-free loans if they are due tax back that they paid while working abroad the previous summer.

Normally, students won't receive their tax back until the end of the tax year in the country in which they worked, but students who use the services of Taxback.com to calculate what they are due can get an interest-free advance.

AIB and Bank of Ireland both offer student loans at a rate that is 1.5 per cent lower than their standard variable rate. Ulster Bank lends to students at 3 per cent lower than its standard rate, up to a value of €1,300, or €2,750 if there is a parental guarantee.

However, Bank of Ireland goes one step further by giving students interest-free loans for up to nine months for the purposes of going to the US on a J1 work and travel visa. The average J1 loan at the bank is €1,500.

Interest-free overdrafts

Here, Ulster Bank is ahead of the rest, offering interest-free overdrafts of up to €650 for first years, €850 for second years, €1,000 for third years and €1,250 for fourth years. The bank says it is currently revising its overdraft offerings.

Bank of Ireland has a nine-month interest-free overdraft facility for students who qualify for a grant but are still waiting for it to arrive.

As some local authorities don't send the first grant cheque of the year until November, this can be a useful option and it accounts for a significant 29 per cent of total student lending at Bank of Ireland.

AIB does not offer any interest-free overdrafts to students, but it does charge interest at 1.5 per cent below the standard rate.

Student credit cards

These are a relatively new phenomenon and, like standard credit cards, are only available to certain individuals who can prove they have the capacity to repay.

Credit limits are €400 at AIB and €500 at Bank of Ireland.

According to Bank of Ireland, 18 per cent of its student customer base has a credit card. This equates to around 25,000 cards.

Commission-free deals

AIB, Ulster Bank and Permanent TSB all offer commission-free foreign exchange and traveller's cheques to students.

Interest on balances

AIB and Bank of Ireland offer interest on credit balances on their third-level student current accounts, although the rates are nothing to get too excited about.

Bank of Ireland gives a quarter of a percentage point on amounts up to €200, three-quarters on amounts between €200 and €500 and half a percentage point on balances over €500.

AIB gives a paltry 0.025 of a percentage point on Student Plus accounts and 1 per cent on its Personal Savings Plan for students. A bonus of 10 per cent on the interest earned is added in first year, 20 per cent in year two, and up to 50 per cent in year five.

Insurance

Students with high-value possessions will find it next to impossible to find insurance cover if they are living in rented accommodation that is shared with others. But if their parents have a policy at AIB or Bank of Ireland, they will get free contents insurance.

Loyalty incentives

Ideally, banks want to still have the business of their student recruits after they graduate.

If all goes according to plan, a student customer will secure an above-average salary and eventually seek a mortgage, then choose a lender on the basis of customer loyalty rather than who has the most competitive interest rate.

To even have a chance of this happening, banks need students to stick with them way past freshers' week.

AIB's reward scheme requires students to make just eight transactions by the end of October in order to receive a €60 travel voucher and a range of discounts.

At Bank of Ireland, first-year third-level student customers who make more than 30 transactions in three months will receive a free return flight from Dublin to a choice of European cities.

There are still token "freebies" and discounts to be had for simply opening an account, however, while existing second-level customers who notify Bank of Ireland of their move to third-level receive €5 in call credit.