Where to save

RC21

I have £6000 in a Mini cash ISA (HSBC - 2nd year) and I can't put anything in it till next April. I usually save about £500 a month and was wondering what I should do with it. If I leave it in my account I will probably spend it on stuff I don't really need. I am saving for a deposit on a house but it's looking more and more likely that i'm never going to be able to afford one. Anyway, any ideas, what should I do with the extra money I save?

Also, I have a £12000 student loan, should I pay this off or just let my monthly repayments sort it out?

Thanks for any advice.
RC

whambamboo

the ISA savings are earning 5% (or should be). The student loan is costing 2.4%. So keep the ISA. Never pay off student loans (the government-subsidised kind) more than you have to.

RC21

Thanks for the advice - I had just been wondering as I had paid off about £265 last year (taken from my pay) but also got charged about £340 in interest, so I haven't actually made a dent in my loan

Cypher

you could open a couple of monthly regular savers paying between 7% Halifax and 12% A&L - £500 a month would give you £6000+interest by this time next year, at which point you could then put £3000 of it into another ISA and then start again with the regular savers. The balance you could shift into a high interest account such as IceSave, ICICI etc

Cypher

£600 on £12k would mean your paying 5% interest

Is this a Student Loan Company loan ? I thought they were supposed to be much lower interest rates. If your paying back at 5% then I would start getting the debt cleared off

whambamboo

Cypher wrote:

£600 on £12k would mean your paying 5% interest

Is this a Student Loan Company loan ? I thought they were supposed to be much lower interest rates. If your paying back at 5% then I would start getting the debt cleared off

must be more than £12k. The rate is definitely not 5%, it's 2.4%:

http://www.direct.gov.uk/EducationAndLearning/UniversityAndHigherEducation/StudentFinance/RepayingStudentLoansPost1998/RepayingStudentLoansPost1998Articles/fs/en?CONTENT_ID=10034867&chk=skiBvV

RC21

apologies - (I just checked my statement) Interest was £350 (I don't know where I got £600 from?)
I have paid £265 off last year.

I have updated my posts above.
Sorry.