saving to go to uni

twickers100

hi, i will be going to uni in setember and will need to save money (£3000) in order to pay off my car loan before i go - i'll be selling my car aswell to pay off the rest, i know, im going to loose money on it! I will be a mature student (24), and have had to temporally move back in with my parents to be able to afford to do this. so my questions are, should i pay money into an ISA for 9 months or would i be better off paying it into a savings account, and will i be entitled to more grants as i am a mature student? - I live in wales but am not welsh, been living here since 2001. my concern is that because i have moved back in with my parents i won't get much of a grant. Please help!!

rb10

What you do with the money all depends on the interest rate. Assuming you are not a taxpayer, then for normal savings accounts, read the gross/AER rate. Compare this with the AER for an ISA, and pick whichever has the highest rate. Chances are, this'll be a standard (i.e. non-ISA) account.

But, are you able to pay off some of your loan early? If this is the case, then it might be worth doing this, as then this will reduce the interest accumulating on the loan.

Oldernotwiser

As long as you've supported yourself for at least 3 years you'll be considered an independent student and not assessed on your parents' income. Where you live is irrelevant.

rb10

Oldernotwiser wrote: »

Where you live is irrelevant.

... other than the fact that, as you live in Wales, you probably get more help than those of us who are in England, if you go to uni in Wales!

Oldernotwiser

rb10 wrote: »

... other than the fact that, as you live in Wales, you probably get more help than those of us who are in England, if you go to uni in Wales!

I meant regarding whether you live with your parents or not. Many people think that you have to live away from home for three years to be classed as independent.

Mike1989

twickers100 wrote: »

so my questions are, should i pay money into an ISA for 9 months or would i be better off paying it into a savings account

Best rate ISA i saw for new customers was Abbey at 2.90% on their direct issue 2 ISA. Skipton BS was about 2.40%, ditto for Yorkshire Bank. So they are about the 2% region after that for Halifax (be careful which halifax account you get) and Lloyds. So you could pay the full amount you are allowed into an ISA at say Abbey, or if you don't need the money if you can find a 6 month bond or fixed rate savings account might be another option. I thinK Halifax offer a guaranted reserve savings account at 3% which can be fixed for 6 months, however, they do have 1 year, 2 years etc so not sure which it is tied to. I have one at 5.5% for a year fixed. So check out that account as it might appeal to you.

Another option is a regular saver. Barclays offer 6% on theirs, so if you put in x amount of pounds first month, second month, third month etc you might make more on interest that way. So ISA vs savings account depends on how long you are saving and how much money you are saving. But ISA's best rate now is 2.90%, so you might be best going for a 6% account with Barclays. However, when you calculate interest on monthly savings accounts remember its not 6% on the full amount, you do it 12/12, 11/12, 10/12, 9/12 and so on and so forth, as you don't get a full twelve months interest each month it goes down per month on the balance. Hard to explain but Martin's site here has a monthly savings calculator.