Advice for a cautious student?

Aethelar

Hello! First time posting, hope I get things right...

I'm looking for some advice for my brother, who is currently a student and has found himself with a bit of extra money. He is careful about what he spends but is nervous about money in general - he definitely doesn't want to try making use of his overdraft or having money stashed in many different places.

Anyway, he has about £3,000 saved up that he'd like to put somewhere safe where he can get at it in case of emergency. What would people recommend? He has a student bank account with HSBC for day to day spending, and a flex account with Nationwide Building Society that his rent goes through. Neither of those pay much interest if any. His ISA allowance is already used up - that was the first thing I set up for him

Would a savings account with HSBC/Nationwide be the best bet? I looked through the instant-access savings article, but neither of them were listed so I'm not sure.

Any advice you can give is much appreciated, and thank you in advance!

CKhalvashi

Aethelar wrote: »

Hello! First time posting, hope I get things right...

I'm looking for some advice for my brother, who is currently a student and has found himself with a bit of extra money. He is careful about what he spends but is nervous about money in general - he definitely doesn't want to try making use of his overdraft or having money stashed in many different places.

Anyway, he has about £3,000 saved up that he'd like to put somewhere safe where he can get at it in case of emergency. What would people recommend? He has a student bank account with HSBC for day to day spending, and a flex account with Nationwide Building Society that his rent goes through. Neither of those pay much interest if any. His ISA allowance is already used up - that was the first thing I set up for him

Would a savings account with HSBC/Nationwide be the best bet? I looked through the instant-access savings article, but neither of them were listed so I'm not sure.

Any advice you can give is much appreciated, and thank you in advance!

Hello and welcome to MSE!

The general aim when keeping money in cash is to pick the best buys, rather than stick with your own bank.

I hold Current and Investment accounts with HSBC, however would never put savings with them, simply due to the rates that they pay (8% regular saver being the only exception).

Coventry BS have the best rates at the moment, so that's where I'd be tempted to stuff the cash until the deal expires. It may be worth considering the account with nearest access to him if he feels that he may need the money.

CK

oldvicar

For a nervous saver, who may worry if there are rumours about the stability of the institution they save with, it may be comforting to know that HSBC is considered the most "rock solid" bank, and Nationwide is the biggest building society by far.

Coventry, recommended in the above post, although much smaller is the 3rd biggest building society, and also unlikely IMO to cause savers any sleepless nights.

All 3 above are amongst the best in customer satisfaction surveys.

Masomnia

I'd just find the best available instant access saver and whack the lot in there.

oldtoolie

If it is an emergency fund, why not pick a multi-year saving bond? It will make it more difficult to access, so more likely to be saved for a real emergency. Just make sure it is an account that can be closed early, if with interest rate cut. He could set it up in an ISA as well.

Spottedleopard

Stick it in an ISA with his bank account. If its likes lloyds tsb, he will be able to get at it online and move it into his current account straight away if he needs it.

With students usually though I would assume the temptation would be to move it over and spend it on rubbish.

He has a nice little lump there that will help towards a car or a house once he leaves university

xylophone

http://moneyfacts.co.uk/compare/savings/accounts/search/

Aethelar

Thank you so much everyone! A wealth of information here, and very useful too Thank you for the suggestions (the assurance that HSBC was a rock solid bank was much appreciated, I've been asked to pass on a cheesy thumbs up to you!)

That moneyfacts link is definitely going in my bookmarks!