Student accounts/cash ISA

chenzo5

My name's Jake, I'm 18 and I'm starting uni in just over 2 weeks.
I was wondering if anyone could give me some advice in my situation here:

About a few months ago I decided to open up a Student Account at Barcleys because I already had my bank account there and it's very close by to where I live.
Unfortunately, I did no research and found out that Barcleys is one of few banks that offers the least overdraft (£1000). So, instead of wishing to cancel that account since my student loan will most likely be put in there, I am deciding to open up a second account at Natwest. This is mainly due to the student railcard on offer so that I won't have to pay so much to get home occasionally, and the higher overdraft (even £250 more than what Barcleys offers is well worth considering).
So is it possible for me to have my student loan kept in Barcleys and use their overdraft if it comes to that, and perhaps use some money from Natwest as well? Or should I not use any of Natwest's overdraft?

Also, I read this website's information on cash ISA's and in order to lower my debt, I'd really like to save. I'm much more of a saver than a borrower and that's why I'm not planning on using much of Barcleys/Natwest's overdraft.
I was thinking of getting a fixed-rate cash ISA because I think it's too risky getting one that's on variable rate and therefore could lose me money. Plus, there are penalties put on those with cash ISAs if they transfer from one cash ISA to another purely because the one you are transferring it to offers higher interest. Is there any fixed-rate cash ISA that anyone would recommend? When should I open one up? And do you think it's best, in my situation or perhaps in general, to go for a cash ISA that does NOT have fixed interest rate?

I know I'm asking for a lot of advice, but I don't feel very confident in undertaking all the research I have done and making decisions based upon it.
Thanks very much,

Jake.

ladyluck101_2

hi... im 18 too, start uni next week.
ive already got a fixed rate ISA with a standing order each month.
ive done a bit of research & from what i can gather, this is the best thing to do...
1.) open a fixed rate isa with barcleys/natwest then move as much of your student loan as you can into the ISA.
this way you can get interest on it.
2.) then, the aim is to live off your interest-free overdraft for as long as possible.
3.) when you reach your overdraft limit, transfer some ISA money back into your student account.
just a quick question... do you have a part time job?
im going to try & live off my wages & leave me loan to accumulate interest! (just to give you something to think about)
hope this helps! xox

kpie

I don't think its a problem having two accounts, but two overdrafts? I think that's a bit dodgy.
I get my loan paid into an account I already had with the Abbey, then opened a new account with Natwest to get the railcard, & when I work I get wages paid into there. But I don't have an overdraft on either. I'd say only use one overdraft, because remember you have to pay it back!

With regards to the ISA, I have one with Abbey. I have no idea what the rate is or anything, but I don't think you can lose money in an ISA, its just a case of getting less interest at the end of the tax year, I think.

Lokolo

I would go against the fixed rate ISA as if you take money out you will lose some interest depending on the terms and conditions.

You can put the overdraft in the ISA, but I wouldn't put the whole overdraft. Only abaout 80% max, just to give you some leeway if something goes wrong you need the overdraft to live or whatever.

I have put £500 of my £1k overdraft from HSBC into my savings account. Plus any extra earnings in there as well from my part time job.

Also I think Natwest requires the student loan to be paid into it, not sure though.
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You must use your account as your main current account and
deposit regular amounts by way of local education funding,
parental contribution, salary, student loan or other funding,
such as sponsorship or bursary

^^ From terms and conditions. It requires some form of regular funding or student loan.

chenzo5

"You must use your account as your main current account and
deposit regular amounts by way of local education funding,
parental contribution, salary, student loan or other funding,
such as sponsorship or bursary

^^ From terms and conditions. It requires some form of regular funding or student loan."

I take it, Lokolo, this refers to Barcleys' terms and conditions, since Natwest doesn't have any as far as opening another account is concerned. It says that on this website.

Lokolo

That was from Natwests site.

http://www.natwest.com/content/global_options/terms/Terms_Conditions.pdf

Page 17 section 4.3

chenzo5

Lokolo: "Is there anything in your terms and conditions to stop them opening a student account with another bank too?

No

This is found under: http://www.moneysavingexpert.com/banking/student-accounts-comparison#t3

I'm confused, if Natwest's statement is true, then that must mean I can't use Barcleys too, since Barcleys requires me to use that as my main account.

From the link you've sent me, does it mean I have to have my student loan put into that account, or could I put my wages in there instead?

kpie: I think it's wise if I stick to one overdraft!

ladyluck101: Who do you have your cash ISA with? And is it likely that the interest rate should go down due to the credit crunch?
I don't have a part-time job actually, I'm hoping that I can get one as soon as I move into university (27th sept).
I've heard that transferring money from your cashISA to your student loan could lose you interest, I'm not sure if that's true?

Lokolo

There is. You have put you student loan into Barclays. This is what is stopping you. It was a generic answer.

You need to put some sort of regular income. Yes. Wages are fine.

If you just use the Natwest account to abuse the overdraft they are likely just to close you account.

And to your question above to someone else. Interest Rates are likely to fall because of the credit crunch and inflation being sky rocketed. Currently it is staying the same for the past few months.

I've heard that transferring money from your cashISA to your student loan could lose you interest, I'm not sure if that's true?

What do you mean? (don't really understand the question)

chenzo5

sorry that last question was put badly.

According to this website, "Never, ever, ever, ever withdraw money from a cash ISA! You'll immediately lose all the tax benefits."
Does this apply to transferring money from your cashISA to your student loan?

I've spoken to both banks and it's illegal to have 2 student bank accounts, which means i'll need to downgrade one of them (that being barclays).

So now I have to contact the student loans company to get them to transfer my first loan payment over to the natwest account AFTER i've downgraded my barclays account, or else I risk going to court (not good!)

I've been told this will take about a week or so to do which is enough time for me to start packing for uni.

I'm not sure what I'll be losing when I downgrade my barclays account, perhaps the barclaycard? I don't know.

Lokolo

They won't take you to court don't worry.

You can change bank details on the student finance website.

Um the ISA thing, basically when you say move from ISA to student loan do you mean repaying it?

surfsister

Lokolo wrote: »

They won't take you to court don't worry.

You can change bank details on the student finance website.

Um the ISA thing, basically when you say move from ISA to student loan do you mean repaying it?

we've been trying and it doesn't work so had to contact them direct to change bank details!