Student wanting advice

atypical

Hello all,

I’m a University student just starting my first year. I’m in the fortunate position of not needing my £3,470 maintenance loan but I took it anyway (as per Martin’s advice) and currently have it in a 6.5% savings account.

By the end of my 4 years I will have some ~£14,000 amassed and I currently intend to keep this money in whichever is the highest paying easy access savings account over these 4 years and beyond. However I’ll lose my tax-free rate of 6.5% after graduation, so should I be putting this money in a cash ISA as I receive it thus utilising my allowance over these 4 years? Or perhaps be fix-terming the money annually into whichever is the highest paying account at the time?

I think I may be over-thinking and over-complicating this.

opinions4u

If you can get a good enough rate in cash ISAs, AND intend to retain the savings post-graduation, then ISA it is. A brilliant idea.

If your plan is to repay the loans in full at the end of the 4 years, then simply chase the best rate in any appropriate savings accounts and make sure you sign the appropriate gross interest declaration.

Keep an eye on the rate you are getting, whichever decision you take. What's good now will not be the best in 4 years time! Review regularly.

halight

Hi mate,
Good idear!!
An isa sounds good as this will be tax free even after your graduation.
There are some good rates around at the moment so shop about a bit if an isa is wont you wont.
All the best and good luck

unhealthyman

It definitely makes sense to take advantage of each years ISA allowance.

I'd probably also recommend not paying off the student loan (but just paying it back normally) as you'll be in the great position of having a big lump sum of savings (i.e. deposit on a house at some point) and the student loan you only pay back when you are earning enough.

It's probably not a bad idea to put some of it in a fixed term account, or setting up a regular saver drawing the money from your savings account (i.e. £250 a month going into a higher interest regular saver, while the rest gets 6.5% in your instant access.) The only big question surrounding these two ideas is whether you have any chance of needing the money at any point - if the answer to that is yes, then I wouldn't bother with the hassle and potential loss of interest.

Lokolo

OP. Follow my lead. :money:

atypical

I should have made clear, I don't intend to repay the loan on graduation. I'll just pay it back the normal way (as a % of earnings). So ISA looks the way to go, more specifically this one.

Thanks.