Saving £11-12,000 for 2 years

uncy_chris

Hi there,

I'm a new member, and I'm also quite new to savings accounts. I'm a student whose just inherited some money and I want to put away £11-12,000. I finish uni in july 2008, so I presume when that happens I will become a tax payer. In the time before that I want to make as much interest as possible. It is not hugely important to have access to this money, as being a student I would probably drink it away!

Anyway, what I'm really looking for is some advice. I don't understand all the technicalities of savings, but I would like a simple savings account that will earn me a good rate until I finish uni. Would bonds be the best option for something like this? A web saver account sounds handy, but would the rates be any good?

Any suggestions are much appreciated.

Thanks

Chris

Froglet

Hi Chris,and welcome to our boards.

I would be hesitant to tie it all up,you never know whether you might need some meanwhile, and it would be crazy if you then couldn't get at it without paying a penalty.I would put your 3k allowance in a good top paying Isa,and make sure that next April you transfer another 3k into it as well.Same in April 2008.Then when you do become a tax payer you will have 9k that you don't have to pay tax on,but you can still use the money if you need to.

Meanwhile i would put the money in a good instant access account ,the internet ones tend to be among the best payers.I have just signed up for the Yorkshire at 5.10.Make sure you register for gross interest.This can then be diipped into each April to transfer across to your Isa.In fact the Yorkshire also has a good rate for its Isa and this would make it very simple to transfer across.You will need a bank account to set them up with first though.

Good luck with your university course.Where are you going and what are you studying?

Margaret

uncy_chris

Good bit of advice. I'm going to do as you suggested and put 3000 initially into an ISA, then same again in April. I might put the rest into an 18 month fixed rate bond at the Woolwich at 4.75%. I'm not sure - there seem to be a few with better rates then that, but the bond time length is pretty decent.

Btw, I'm in my third year (of four) at Bournemouth Uni studying Product Design. Currently living and working in London on a placement.

Titan

uncy_chris wrote:

Good bit of advice. I'm going to do as you suggested and put 3000 initially into an ISA, then same again in April. I might put the rest into an 18 month fixed rate bond at the Woolwich at 4.75%. I'm not sure - there seem to be a few with better rates then that, but the bond time length is pretty decent.

Btw, I'm in my third year (of four) at Bournemouth Uni studying Product Design. Currently living and working in London on a placement.

You can do A LOT better than that with a bond, there are some paying well over 5% and your money is tied for only one year. Even an instant access saving account gives you more than 4.75%! As a rule, when choosing a savings account, it MUST be over the bank of englands base rate, at the moment the base rate is 4.75%.

You can get an ISA with Ruffler bank that pays 5.75%, that's a great rate at 1% above base rate!

Hope that helps!

Titan