Student needs help- no idea about savings!

rach_b07905

So yeah, as the title states, I'm a pretty clueless student. :money:
(Aha that smily is pretty cool!)

Anyway, I have been awarded a £1000 scholarship, and unlike some other students I know who are planning on spending it on booze and clothes and the like.. I want to do something sensible with it :-)

I don't know much about savings and stuff but I have heard of a kind of account that you put a set amount into (say my £1000) and it has to stay in there for a fixed amount of time and you will get a better rate of interest...

I just have no clue what to do and my parents are pretty unhelpful when it comes to things like this :P Can anyone give me a point in the right direction??

Thanks

archersluck

Wonder if you're at my uni, I get my £1000 in a couple of weeks Well done on planning to save, I wasted mine in 1st year. Spent 2nd years on car I needed for my year in industry - since sold that and have the cash in a 1 year fixed savings account. This year's is paying for a trip to Oz. Have a look at the savings link at the top of the page and it will tell you the best interest rates for different bank accounts, you're probably not a tax payer so you'll get the full interest rate though you might have to fill in a form to do that so don't forget!

snowqueen555

You may need that money during your studies, I wouldn't lock it away, I think £1000 is worth a lot more when you're studying than in the future where you're be earning that kind of money afterwards.

You can get fixed rate bonds but the returns are not very good to be honest, and most news articles I have read have suggested to NOT lock it away for years at a time because interest rates are predicted to rise this year.

opinions4u

I would agree with Snowquuen not to lock it away, although Lokolo's post is quite amusing .

So I would place it in to an account that provides you with some sort of access, but remain disciplined enough not to use it if you don't need it.

Sites like www.moneyfacts.co.uk can allow you to compare rates with different providers.

A few accounts to consider: Halifax ISA Direct Reward 2.8% (tax free, easy access); Post Office easy access account (2.9% unlimited withdrawals); ING, Tesco, Nationwide may also be places with a competitive rate in today's low interest environment. Take a look at your own bank's best rates too. If you can get 2.5% and manage it alongside your current account that will pay you £4 a year less than the Post Office option but be something you value as more convenient.

So balance up your desire to retain the money longer term against your possible need for a financial cushion at some point and your ability to be dsciplined enough not to use it for frivilous spending and take it from there.

One final word of advice. Savings providers tend to offer rates with a bonus for a year, or gradually reduce the value of a product the longer you hold it for. Keep an eye on this habit and be prepared to move accounts from time to time in order to get a decent rate.

Good luck and carry on with the mature approach to money!

Lokolo

opinions4u wrote: »

I would agree with Snowquuen not to lock it away, although Lokolo's post is quite amusing .

I deleted it. I felt as though it didn't represent me in a good light... (it was my brothers 21st last night!)

darkpool

tbh i would just put it in your current acount. I know i'll be criticised for saying this, but spending more than a day of you life researching interest rates then opening an account isn't (to me anyway) worth the annual interest you are going to get.

Primrose

If you're going to need some emergency money, why not keep about £300 of it in an easy access account and put the remainder into a one year fixed rate savings account at the best interest rate your can find. Some accounts have a minimum investment limit of £500 or £1000 so that might restrict that number of accounts available to you.