Sensible banking doesn’t mean leaving all your money in your bank account. It means doing the best for your money and your money will do its best for you. What’s more, your bank will respect you for it.

For instance, take advantage of being in credit. It won’t happen often or for long.

When you’re in credit or should that be if don’t keep all your student loan or other money in your student bank account. The rate of interest will probably pay out something like 10p a year for every hundred pounds.

Instead, transfer some of it into a separate savings account that you should keep on the side for any windfalls - such as money you earn over the summer, birthday card payouts, inheritances from your long lost Aunt Maud, whatever. Try comparison sites like www.moneyfacts.co.uk and www.moneysupermarket.com or the Best Buy tables in many of the quality Saturday and Sunday newspapers, for a summary of who’s offering what.

Remember, when your account’s in credit, you want the highest interest rate possible. It’s the opposite of overdrafts and credit cards, where you want to go for the lowest rate of interest (or, even better, interest-free).

Your bank knows that your student bank account is there for your short-term cash needs. That’s why it has the overdraft facility. But just because the account might spend most of its time in the red, it doesn’t mean that when you’ve got money your bank will expect you to keep more in your current account than you have to.

In fact, Mr Bank Manager will probably be only too glad to open another account for you that pays interest, but that you won’t be able to overdraw.

That way, while you’ve got money, you won’t be losing out on the opportunity to make it earn you more money. But be careful not to get stung with charges just because your money was in the wrong account.

Check how long it takes to transfer money between your two accounts it can often be done instantly if your accounts are held with the same bank, but will probably take up to three working days to wind it’s way to a different bank.

• Staying friends with your bank
• Banks

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