Saving as a student, please help!!!

merten_4_mcguffin

Hi there, I'm a 4th year medical student in belfast. I recently got my overdraft extended to 10 grand (0%!) so I can go on my elective. I don't need all that money so I thought I'd stick some away...and i need advice.

Should I go with a cash isa or a fixed term bond? i've never had money, either have my parents so I don't know much about this. People are telling me I should go for fixed term bond because it's got better rates and I don't pay tax anyway so the isa's benefit is nullified...

also, after letting me know which I should go for can anyone recommend me any? I see that anglo irish has good rates but it's duffed so I don't want to go there...any advice?

cheers

Lokolo

You asked this in the student forum bit, ONW told you to post here. I have already replied to your original

http://forums.moneysavingexpert.com/showpost.html?p=17998581&postcount=3

My response.

withnell

You don't pay tax now, but if you're still going to have those savings when you start earning then they'll still retain the tax-free wrapper

Mike1989

There is the possibility you can take out a Halifax Regular saver. You can put in up to £500 per month at an interest rate of 5%. Remember though you get 500 * 5/100 * 12/12, 500* 5/100 * 11/12, and so on and so forth. Plus you can close the account in question whenever needed, change the amount you pay in each month. Roughly speaking you would make well over £100 in interest over the year.

You could take out an ISA, best rate I've seen to date is Abbey's 2.90% direct issue 2 ISA. ONly thing is you can put in £3,600(?) per year. So if you did it before April, you could put in a further £3,600. So if you went that route you would make £104 interest in that ISA.

So my advice is set up a standing order from your current account to pay £500 per month into a regular saver at the Halifax. You will make more interest than in any current ISA rate and fixed rate bond.

rb10

Mike1989 wrote: »

There is the possibility you can take out a Halifax Regular saver. [...] Plus you can close the account in question whenever needed

You can close it early, but the interest paid will be at the Web Saver rate (~1%) if it's closed early.