Students in search of a new current account need to take into consideration the overdraft facility on the product, Defaqto has advised.

The independent financial research company explained that although the incentives for signing up for an account may seem tempting, they should not be the only factor taken into consideration.

David Black, Defaqto's insight analyst for banking, commented: "Although money management may be the last thing they want to consider, doing the homework up front and getting the right account in place could pay significant dividends."

He highlighted that students need to focus on what the conditions of the account would be if they were to become overdrawn, and what will happen once they have graduated.

The group explained that some current accounts will offer an interest-free overdraft of up to £3,000 a year up to graduation and beyond, while others will increase the facility over time.