UK lender Lloyds TSB is handing out free Apple iPods in a bid to grab a share of the student account market, which is seen by many banks as the most lucrative retail customer segment.
The bank is also offering an interest-free GBP1,500 overdraft for the first three years at university, rising to GBP2,000 in years four, five and six. Students also receive free Youth Hostel Association membership and free cinema tickets.
HSBC is also offering a music and video player while NatWest is giving away a five-year railcard worth GBP100. Barclays has decided to stay away from freebies and is focusing on an interest free overdraft deal instead.
Persuading students to open an account is important to banks as two-thirds of customers who open an account as a student remain with that bank for life.