Student wanting to Invest Loan

h.budge

Hi there,
Im in the similar position and would like to invest my money However i did not know that you can only deposit one amount into an ISA each tax year. My loan will be received in Installments, each term. I want to get my loan earning interest asap, what is the best thing to? Is it better to save up all my loan installments which total about £3500 each year and deposit it into and ISA each year or is it better to find an account which will accept me making three deposits into it each year, which is high interest? do these exist? Im happy to have my money locked away for up to 3 yrs
any ideas?
thanks

bendix

Is it really worth the effort? Seriously.

17.5 in money given to you over several years (ie not all in one lump sum). You have to repay it, plus interest of 1.5%, and you're probably only going to get a maximum of 2% return on it.

So what sort of gain are you looking at after several years? 20 quid? 50 quid?

It's hardly worth bothering about, surely?

DragonQ

bendix wrote: »

Is it really worth the effort? Seriously.

Yes...

bendix wrote: »

17.5 in money given to you over several years (ie not all in one lump sum). You have to repay it, plus interest of 1.5%, and you're probably only going to get a maximum of 2% return on it.

So what sort of gain are you looking at after several years? 20 quid? 50 quid?

It's hardly worth bothering about, surely?

Where has this 2% come from? Both Cash ISAs and instant-access accounts have been above 3% for a while now. I'm earning over £900 a year in interest using normal savings accounts and all of that money is from my year in industry pay and student loans, grants and bursaries. My student loans are increasing by less than £400 per year (1.5%) so that leaves me with a net profit of more than £500 per year.

If you go on to do a postgraduate degree then it's even more beneficial because, as I said above, your pay isn't taxable income so you still get gross interest, plus you have an income source to boost your savings each month.

Like wastedtalent above, I intend to use my lump sum as a property deposit in two years' time. Hopefully the house market won't have returned to its booming ways by then.

dggar

I think I'm missing something here.
If the student loan(s) are being put into savings accounts what are these people using to cover their food,rent etc.

DragonQ

dggar wrote: »

I think I'm missing something here.
If the student loan(s) are being put into savings accounts what are these people using to cover their food,rent etc.

Money from elsewhere.

The question is, is it worth it to take out loans if you don't need them? The answer at the moment is quite easily YES.

laughingboy

i suppose its nice being in the position to be able to just save the loan cash instead of using it to live

Lokolo

bendix wrote: »

Is it really worth the effort? Seriously.

17.5 in money given to you over several years (ie not all in one lump sum). You have to repay it, plus interest of 1.5%, and you're probably only going to get a maximum of 2% return on it.

So what sort of gain are you looking at after several years? 20 quid? 50 quid?

It's hardly worth bothering about, surely?

We can also profit more if we don't end up paying the loans back after 30 years. So if we still owe £15k, it gets wiped and we've got that in the bank account.

bodmil

Remember though that you are paying interest on the loan so if you intend on earning a decent crust and will therefore repay the loan you might be better of doing so quickly. Avoiding paying it off or seeing it as an eternal tax rather defeats the object of going to uni in my mind! I might have lost a few hundred pounds in interest but I paid off my loan within a year of graduating but the feeling of being entirely debt free was worth the price!