University savings account

Froggitt · 16 July 2010 at 10:44AM

ISAs the best place, but Im not sure if the money has to be invested by the ISA owner, not by his parents/GPs. So give the cash do him, and let him stuff it in the ISA (or invest in the bar).

CLAPTON · 16 July 2010 at 10:53AM

jennifernil wrote: »

A part time job will help boost his income, and living at home will save a lot, unless he has a lot of travelling expenses.

Before you decide on an ISA or not, I think you need to look into how the money will be used. Will he want to use it to pay off debts, or will he want to keep it towards getting his own place/buying a car/etc/etc .......

With the max ISA allowance now £5100 per annum, the £2200 + interest saved each year could possibly be in better paying non ISA accounts initially to see how things go, then after 2 years he would still be able to put it all into an ISA it that is the decision.

If he has a part time job and works in the vacations, he could well be into paying tax, so there are quite a few calculations to make.

Good luck!

I don't understand this

if he doesn't use the ISA then its lost forever after the year
if he does use it but needs to withdraw funds then he's no worse off that if he never opened in in the first place
if he does use it and keeps some or all then he's better off

jennifernil · 16 July 2010 at 10:29PM

I was only suggesting that, if he is not to be a taxpayer while a student, then the best non-ISA account might well pay a better rate of interest than an ISA account.

Since the amount to be saved each year is much less than the annual ISA allowance, if the student decides to continue saving rather than using the money, even after 2 years all the savings could be placed into an ISA in one go.

Maximise interest, keep your options open.

However, with all rates so low, we are not talking abount a fantastic difference.

University savings account

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