Investing Student Loans And Other Questions..

Daniel1234_2

Hi all,

In a few weeks I will be a student, doing a degree course, in a university pretty much on the other side of the country from where my parents live. I'm 19 and I have a part-time job, but my family is not rich so I'm trying to save/make as much money as possible while I'm a student. This is my first financial freedom so I'm not used to dealing with banks, loans, and so on.

So I popped out on Friday with the intension of getting a student account. I've already taken out student loans from the SLC, to be paid into my Barclays current account, which has now been converted into a Barclays student account. Why Barlcays, because I already had one.

Perusent to the line in the Top Bank Account For Students article which says investing in a high interest savings account might be a good idea I then opened a student account with Natwest and Halifax. Halifax asked if I had existing student accounts, I said I hadn't (which was technically true as the paperwork won't go through until sometime this week), but that I did have a Barclays current account.

I now have three student bank accounts and an interest free combined overdraft limit of around £4,000. My problem is, I didn't look at the chart before opening the Natwest account and it says that it must be the only student account. However, I was never asked this during the interview (and the person knew I had a Barclays current account). Do you think this will be a problem...?

Now secondly, what to do with the £4,000? I closed my ISA for this year and withdrew all £1,000 of childhood savings money because I felt the money would probably need to be accessible when I need it. So this week I suppose I'll be opening a Lloyds TSB Classic Plus Account and a Regular Savings Account.

So I'm kind of looking for any advice you people could give me for how to budget between these four accounts. It seems quite a few people on the forums have been investing their student loans (though if their is a thread about it I can't find it), so if there are any large warnings or caveats I could have, well I'd really appreciate that. My main worry is that in two years someone will ring me up and demand to know why I've been £2,500 overdrawn for lifetime of the account...

Thanks in advance!

Daniel

Savvy_Sue

I don't think there's any alternative to being disciplined here! You need to keep money moving in and out of each account, to keep them active.

You might decide to use each account for one particular purpose. So from account one, you pay your tuition fees. From account two, you pay your hall fees. From account three, you buy food and essentials. From account four, you buy your social life. Make sure there's enough money / free overdraft in each account to do what you want - it's called budgeting! Make sure you use the 'right' account for each activity - stop and think at the cashpoint! Make sure you check your statements VERY regularly - online if you can, and certainly check your balance before pulling more cash out of the machine!

The warnings: one or more of them may say that it's a requirement to pay your student loan in. NatWest and any other which wants to be the only student account may withdraw the overdraft facility or charge commercial rates on it if / when they realise you've broken the T&C of the account. At the end of your course, you'll have to pay them all back, somehow, or pay huge rates of interest! So be disciplined about saving your overdrafts, DON'T see it as money to spend!

Daniel1234_2

Thanks! To be honest I was thinking of "spending" the overdrafts in a regular savings account but I'm not sure if I'll have enough to do that. I'm not planning on receiving much help from family, so what do you guys think?

Daniel