How should I invest my teacher training bursary...

dogthomson

Hi,

I am 22 and am just going into teacher training. As there is a shortage of people wanting to teach ICT, I will receive a £9000 training bursary (Wahey!) which is paid in 9 monthly installments of £1000

I do not really need this money to live off, however I am terrified I will spend it all on nowt, so I would like to put some away for a rainy day.

After reading the 'Savings Fountain' I realise that a cash ISA is the way to go, and have applied for a cash mini ISA from NS&I (http://www.nsandi.com/products/isa/overview.jsp)

The bit I am having trouble with is what to do next, once the accounts set up. Should I simply set up a standing order for £1000 for 3 months until I have used up this years tax-free allowance in order to get the maximum amount of money accumulating interest ASAP?

Also, what then? Open a high rate savings account for the remaining £6000?

If you were me, what would you do!?

Any advice would be greatly appreciated!!

matt4504

dogthomson wrote:

Hi,

I am 22 and am just going into teacher training. As there is a shortage of people wanting to teach ICT, I will receive a £9000 training bursary (Wahey!) which is paid in 9 monthly installments of £1000

I do not really need this money to live off, however I am terrified I will spend it all on nowt, so I would like to put some away for a rainy day.

After reading the 'Savings Fountain' I realise that a cash ISA is the way to go, and have applied for a cash mini ISA from NS&I (http://www.nsandi.com/products/isa/overview.jsp)

The bit I am having trouble with is what to do next, once the accounts set up. Should I simply set up a standing order for £1000 for 3 months until I have used up this years tax-free allowance in order to get the maximum amount of money accumulating interest ASAP?

Also, what then? Open a high rate savings account for the remaining £6000?

If you were me, what would you do!?

Any advice would be greatly appreciated!!

Why didn't you just have a Maxi ISA? I mean its got a £7000 limit.... Put the rest in a regular saver for a year?

dogthomson

^^ I'm unsure as to how a Maxi ISA works, its silly I know but I'm comfortable with the tax free cash (i.e. the first £3000) but the stocks and shares bit (other £4000) scares me as I know so little about it!

Can you reccomend a decent Maxi ISA I can look at?

SeanW

£4000(min) in a Maxi would be in stocks and shares, and if you don't know about it, and don't want to, it makes sense not to invest in it, that's not silly.

You would have to be looking at keeping the money in the stocks & shares component in there for at least 5-10+ years as with any investment, to increase the chance of a good, positive return.

I'd put the first £3000 into a Mini Cash ISA.
The N&S Direct ISA might be a better option for you. It has a 5.3% interest at the moment, you could open it with your first £1000(Which is the min). This would depend on how far you got with current application, as you can only have 1, and the direct wont take in transfers.

I'd then put as much of the rest into regular savers as possible (Such as A&L, you will need to have a current account with these, check the conditions).

I'd then put the rest into a high interest paying savings accounts.

If/When you need money, i'd take from the savings account first, as the ISA money would lose tax free status, and regular savers would probably be closed(and a lower rate of interest paid on what you did have in there), so at least some money might be in a savings account with no restrictions.

dogthomson

^^ Thanks SeanW.

I dont think the money is best put away for 5-10 years as I am looking to go to Japan in a couple of years time, so I think I will do as you reccomend.

I have completed the online part of the application process, but have yet to have anything posted out to me, do you think it is too late to switch?

dogthomson

Well, just called NS&I, they told me that when I get sent out my conformation letter to sign, I should send it back with a letter stating that I wish to cancel the opening of the account.

Phew! Will be able to get the 5.3% DIrect ISA after all!

SeanW

Here is a comparison for you to check before you do that:

http://www.nsandi.com/products/isas/from_isa.jsp

Things to note are a min £250 deposit after the min £1000 opening, and a min £250 withdrawal.