what is the best savings account for students?

skintscotsstudent

Hi i know that HBOS is the best account for giving 0% interest on student over drafts , so after i get the maximum overdraft i obviously want to put it in the highest interest student savings account( ie/0%tax) possible.All help will be appreciated greatly as ive spent half an hour going round in circles on this site,ive no time thanks , Skint

CLAPTON

There are no such things as student savings accounts...
you can avoid paying tax on your savings by using a cash ISA (max 3k per year)
or if you will not earn more than 5225 per annum you just fill in a R85 when you open any saving account.

So just choose a saving a/c with a good interest rate and suits you (i.e. do you want internet access, cash card, prefer local branch etc etc)

melancholly

CLAPTON wrote: »

or if you will not earn more than 5225 per annum you just fill in a R85 when you open any saving account.

do this to make sure that you get the gross interest rates rather than the net ones (so you won't have a taxed interest rate).

Broke_Student

As mentioned above, the savings accounts available to students are the ones available to normal adults.
For most working adults ISA's are the best as interest is tax free.
For a student, if you do not pay tax, you should look for whatever pays the higher interest. This is only if you think you will spend the money soon after you graduate.
If you are considering having the savings banked over a long term after you graduate then you should certainly make use of the ISA allowance.

skintscotsstudent

Clapton, Melancholly and Broke , thank you so very much for the fast replies of excellent information and good will.All the best in all your financial endeavours ;thanks again , hopefully not SKINT forever, cheers

skintscotsstudent

So my plan is thus, get all my funds paid into my student HBOS account until i can get the max (OD) @0% interest then transfer them to a savings account or isa?;I hope ive got this right.Firstly; High interest savings accounts(eg/Yorkshire BS regular saver) pays 7.10% gross pa but the rules are you have to make a minimum monthly payment into it of at least 10 pounds(and you are allowed to miss one payment per year), you are also allowed one penalty free withdrawal per year too (perfect if i suddenly{as is in their rules} have to pay off my HBOS Overdraft(OD).
I wonder what is the penalty for missing two monthly payments or making two unauthorised withdrawals? or how long it takes to authorise a withdrawal? anyway...
I am sorry for being a numpty in this but really do appreciate sound advice.
Now assuming i leave enough in the HBOS or other account(covering regular expenses) and set up a direct debit from it to the Yorkshire BS savings account that covers the 10 pound minimum deposit for the savings account, then i should be able to leave the bulk of my funds safely there.
I know from previous advice i can apply for a R-85 form so that there is no tax taken from the Yorkshire 7.10% account funds??? Hopefully ive got it all worked out correctly but what about an isa instead of a savings account? is the main difference you need to give longer notice before withdrawing? and also the savings are def tax free if you abide by the rules.The isa's mentioned in this site seem to pay a lower rate as the Yorkshire reg savings, so surely this is the way to go, or am i missing something.I again apologise(for prattling on), for picking your brains and perhaps taking a wee bit advantage of your good natures but i really do appreciate all sound & relevant advice, cheers sincerely Skint..

CLAPTON

One of the considerations is what you expect your patttern of spending will be and so whether you will need to regularly withdraw funds. Bare in mind that your student loan is paid in a lumpy way.. i.e. three times a year so many students find they need to withdraw funds from savings at the end of terms until their loan arrives at he beginning of the next term.

Also consider whether you will be a net saver over the course of a year or whether you will actualy 'need/want' some of the overdraft to spend.


It is a strange anomoly that ISAs often do indeed pay a little less than the best normal account but thats life.

The YBS regular saver is structured as a 3% savings with a bonus so if you dont abind by the rules you end up with a low rate or they may even close the a/c. Also remember that you can only pay a max of 500 per month into the a/c so you couldn't simply transfer say 1000 of overdraft to it in one month.
Withdrawals can be done online and so will take 3/4 days to be transferrred to your bank account.
And yes if you fill in R85 they will not deduct tax (I think you can do this online too but they will send you the form to be signed.)

Its not really the best a/c if you want to withdraw funds and normally I wouldn't think it suitable for the average student who has little money but then your full circumstances may be different.

Also remember that ISAs limits you to payments of 3000 per year so you couldn't (say) pay in 3000 then withdraw 2000 then pay in another 2000 all in the same tax year.

The differences between ISAs and ordinary accounts is the tax treatment. Except for the limit of a max of 3k for the ISA, rules about how long it takes to withdraw or the number of withdrawals or maximum / minimum payments etc are just up to the savings company.

coheritie

hi.
Im a student going into 2nd year but already £2250 with 3 more years to go...But I have a plan of how i can gain money from nothing but i need your advice, tell me what you think:

1st- option
Open an Isa account and three others student accounts, get £3000 each year and get about 6% interest.

2nd- option
Open a normal saving account and three or more others student accounts, get £3000+ put in the saving account till I graduate

wht do u thg?

coheritie

I meant £2250 overdrawft