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Where should I put my student loan?

To cut it short without my life story, my question is in bold.

Im half way through my first year at university. At the moment my loan is sitting in two accounts, a classic account from Lloyds TSB and a student account from Halifax, with the majority of it in my Halifax account.

The money is not being very productive in terms of generating interest, with Halifax offering the best interest rate of 2.02%.

Ive attempted to open ICICI savings account at the end of last year but wasn't easy to open as first expected as I needed to verify my identity, which I have yet to do, I don't really want to send off my passport or drivers license by post.

I've been hoping to get the ICICI open, but I thought about tax deductions, this will then reduce the overall interest made annually which could raise questions to if ISAs would be the more favoured choice for maximising interest.

ICICI savings - annual rate of 5.03% gross, Annual Equivalent Rate (AER) of 5.15%

Anyone have any suggestions where it would be best to put my loan? Any other form of investment other than ISAs and savings worth looking into?

I don't exactly have much money to invest, the loan i've received so far is £2180 and will increase when my next loan comes along.

I'm not going go gamble on shares yet but in the other half of this year i'll be investing in a company already chosen.

Comments

  • VickyA_2
    VickyA_2 Posts: 4,688 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Although it's a few years ago now, I put my student loan into various accounts including ISAs and a fixed term and rate bond.

    I believe that the Halifax's ISA is quite a high interest payer at the moment. It's also instant access, should any emergencies arise. What was left over, I put into a high-ish interest fixed term bond with the Northern Rock. Not saying that they're competitive now, but it was at the end of the 90s!
    Sealed Pot Challenge #021 #8 975.71 #9 £881.44 #10 £961.13 #11 £782.13 #12 £741.83 #13 £2135.22 #14 £895.53 #15 £1240.40 #16 £1805.87 #17 £1820.01 #18 £2021.83 declared
  • Halifax ISA is very good and very flexible!
    "...So...we've got a drop off, a double-cross, an ambush and then what?...then they shot a tramp..." :rotfl: [High Heels and Low Lifes]
  • misskool
    misskool Posts: 12,832 Forumite
    10,000 Posts Combo Breaker
    A&L issue 2 is paying 5.15% until mid-2007. If you don't earn enough to pay tax then fill in an R85 to get gross interest. Student loan, grants and maintanence allowances are tax free so don't take those into account.
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