THE NATIONAL CONSUMER Agency is advising students to compare bank account options very carefully and to watch out for any penalty bank charges.

The NCA compared a range of student banking products offered by AIB, Bank of Ireland, PTSB and Ulster Bank and found that while these accounts offer free transactions, the penalty fees can be substantial.

Non-payment and referral fees can be as high as €12.70 per transaction on some student accounts, while surcharge interest rates on unauthorised overdrafts can range up to 12 per cent.

“Students need to compare all options available to them before they choose an account and not just pick the account with the best incentive,” said NCA chief executive Ann Fitzgerald.

“As most students are on a tight budget, having to pay an unexpected charge on their account of up to €12.70 could be more than they can afford.”

Students who are considering borrowing to help them cover the costs of going to college should devise a clear plan of how long they will need the loan for and how they can make repayments, she added:

Be aware that if you miss repayments, or fail to clear a loan or credit card, it will show up on your credit history for five years after the loan is closed and this may affect your ability to get a loan in the future.

Fitzgerald also advises students to keep track of their bank account balance and to try to budget their finances to avoid incurring penalty charges where possible. ”This is particularly important if you are sharing accommodation and taking responsibility for a direct debit for utilities or shared expenses,” she added.

As well as their full student account comparison information, the NCA’s website also offers a budget planner and spending calculator to help manage personal finance.

Figures compiled by the NCA dated 21 August 2012