Basic advice for a student.

rypoll

Hi,

I'm currently in my second year of university. I've had a few bursaries over the past year - directly from the university and the student loans company.

As a student living at home I've got it pretty cushty and my spending is minimal (clothes and miscellaneous stuff). Anyway I've gathered about £4000 in loans and bursaries and I'm unsure what to do with it. I've got £1k in an ISA with Natwest (had to take £2k out last year to pay tuition fees [loans came late]) and almost £3k sitting there in my current account.

Now the question is, how do I simply but effectively maximise the profit from this money? I mean when it comes to banks I've got no idea what to do - for instance I don't even know if I'm paying tax on my interest.

From the information our Marty has blessed me with I'm guessing that switching accounts to a high interest bank would the best option. But isn't that difficult with the NW account being a student one? Should I just shove it all in to an ISA?

It's all guesswork, and all feedback is welcomed.

Cheers for reading! (And a Brucey Bonus to you for replying).

- Ryan
[Just want to commemorate my first post by saying.....this forum is top]

Lokolo

Ok firstly - do you have a job which earns over £6035 a year (i.e. do you pay tax?)?

If not then is does not matter if you use an ISA or not. You can just stick it into a high paying interest account and fill in an R85 form to get tax free interest. However this method will mean that when you start earning and paying tax, the interest will be taxed.

Whereas if you put it in an ISA it will never be taxed.

Having a student account won't affect you any savings accounts.

rypoll

Hi Lokolo, cheers for the response.

No I don't have a job. So you reckon I should just transfer my funds to a high paying interest account (and what banks do such accounts belong?)? Is the R85 form available online? Is there anyway to tell I'm paying tax on the NW account?

Again, cheers for the response.

Lokolo

http://www.hmrc.gov.uk/forms/r85.pdf <--- PDF for the R85 form.

Um. NW - your student account yes? I would just ignore it to be honest, the interest you get from it is minimal and you would gain 1p or something from it.

I would leave the £1k from the ISA inside it. You have the £3k outside.
Is the ISA from this tax year? If so you can top it upto £1600 (if you deposited exactly £3000 so far, you can have £3600 deposit each tax year).

I would open up a savings account with someone and put that £3000 inside that. Then come April open up another ISA and put £3600 in. (you have 2 more student loan payments before then)