HSBC and Lloyds TSB are unveiling their latest graduate services ahead of the new academic year in September, in an attempt to attract student accounts through free gifts and promotions.
HSBC is offering an MP4 music player or ten free CDs, while Lloyds TSB is banking on the iPod Shuffle music player as its main incentive.
Stuart Glendinning, director of loans, savings and current accounts at online comparison site Moneysupermarket.com, says student accounts offered by the big high street banks differ so little that free gifts are fast becoming the deciding factor.
“There is so little difference between the providers ,” Glendinning says. “Why are the banks offering these terms for students? The reality is they know these customers are going to be locked in for quite some time, not least because, when they leave [university], they are saddled with debt.
“There are going to be more and more incentives offered to students who are increasingly becoming poorer and poorer.”
Students also actively switch current accounts in a sector where inertia means most people don’t bother, says Glendinning.
More than 400,000 people applied for UK university or college places in 2005, according to Ucas, the organisation that processes applications for undergraduate courses.