Saving account for a student

ziggycj

I am currently with Lloyds on their student account so I also have their easy saving account.

From my 1st year student loan I have £3000 that I would like to save for 2 or 3 years.

Which account would people recommend for me to make the most out of the money. And, other than savings accounts, what ways are there to make money from money?

What I an ISA and do you need to be employed to get one? I dont have a job, but as I'm living at home I am unlikely to need this money until 2012.

Thanks.

xrjtg

All UK residents aged 16 and over can pay up to £5100 into one cash ISA each year. If you're not paying tax now then the only advantage is that you'll be protecting the money from taxation on interest in the future: with £3000 this probably isn't a concern as you can get it protected in any later year should it become necessary.

There are articles on the main site discussing the best savings accounts.

How to make money from money is a very wide question and covers essentially all business. A short answer would be "in practice, shares". Somebody might have a shot at explaining unit trusts later, which are usually the way to go for small amounts.

edinburgher

How to make money from money is a very wide question and covers essentially all business. A short answer would be "in practice, shares".

Generally speaking, I don't think that shares are a good bet for 2-3 years, most decent advisors recommend 5 years+ in my experience. Also, cash savings are probably better for the OP as they're a student and may need the money sooner than they think. They might be on the ball and plan everything meticulously, but the one thing I remember about my finances from my recent time as a student is that they were far from fixed!

ziggycj

edinburgher wrote: »

Generally speaking, I don't think that shares are a good bet for 2-3 years, most decent advisors recommend 5 years+ in my experience. Also, cash savings are probably better for the OP as they're a student and may need the money sooner than they think. They might be on the ball and plan everything meticulously, but the one thing I remember about my finances from my recent time as a student is that they were far from fixed!

I am completely sure I will not need this money until 2012. I have an extra £1000 and my student loans that I will get for the next 2 years and I'm not a big spender (my parent by everything since I'm living with them). I want a fixed 2 year bond with a very high interest rate.

So an ISA wouldnt be needed? Will I not get taxed on the £3000 if I dont earn over the £6000 (?) limit?

Thanks

xrjtg

edinburgher wrote: »

Generally speaking, I don't think that shares are a good bet for 2-3 years, most decent advisors recommend 5 years+ in my experience. Also, cash savings are probably better for the OP as they're a student and may need the money sooner than they think. They might be on the ball and plan everything meticulously, but the one thing I remember about my finances from my recent time as a student is that they were far from fixed!

I agree entirely. That was a response to the "other than savings accounts, what ways are there to make money from money?" question, to which I think it was an accurate, if abrupt answer. Perhaps not too helpful though!

ziggycj wrote:

So an ISA wouldnt be needed? Will I not get taxed on the £3000 if I dont earn over the £6000 (?) limit?

If your total earnings including interest and any wages come to less than the personal allowance you can fill in an R85 for each account you open and receive interest without tax being deducted. If you earn more then interest will be taxed and ISAs could be worthwhile.

edinburgher

That was a response to the "other than savings accounts, what ways are there to make money from money?" question, to which I think it was an accurate, if abrupt answer. Perhaps not too helpful though!

Concise answers are fine and I certainly wasn't criticising what you said. I simply wanted to provide a bit of context to show the OP that cash savings were the more likely choice for them