Investment of Student Money

Gingerbusiness

Hi All.

This is my first post so please be gentle with me! :rolleyes:

I am returning to university on Sunday after almost 4 years out due to recovering from the dreaded Meningitis virus.

Over the last year I have managed to save £5000. As the current student loan interest rate is 0%, the sensible thing to do would be to invest my savings plus any left over student loan.

However, I know very little about the current market and I would like some advice as to what would be the best yield for myself. Just to let you know, the money can be in savings or investments for a MAXIMUM of 18 months.

If anyone can give me any advice, that would be brilliant!

Thankyou for reading! :beer:

gozomark

How much of your money are you prepared to lose ?

Assuming zero, plus given you mention only 18 months, investments are not for you

Gingerbusiness

Ideally I would like to lose nothing but I would like a candid opinion of what you think I should do with the money.

Thanks :beer:

gozomark

ideally none of us want to lose money, but how much of your money are you prepared to lose in a worst case situation ?

Gingerbusiness

£1500 + interest if needs be - but preferably nothing :A

withnell

Stick it in a one year bond - you can get 3.75% until Nov 10 with Northern Rock

Primrose

In your case, I would steer completely clear of equities. The time span is far too short for you. A one year or 18 month bond looks like the best bet. If you go to Moneymarket.com there is an option on there, in the Savings Section to check out all the fixed term offers available. I don't know whether you're a taxpayer. If you are, putting the money in a Cash ISA, if you can find one paying a reasonable interest, might be another option for you, especially if you plan working in vacations where income might put you into the tax paying bracket.

katiemcg83

Perhaps things have changed but I graduated in 2005 and was surprised to find that I had been paying interest on my student loan since they gave me the first paymet so you may want to check that out so you can factor that in if still the case.

rb10

The interest rate is 0% for the current academic year (1st Sept 2009 - 31st Aug 2010), so any savings account will be earning you more interest than the loan is accruing.

In future years, then definitely make sure you know what the rate is (it's on the Student Loans website), and ensure you have your money in a savings account earning more than this.