Best account for a student who's not spending their Loan?

studentsaver2007

I don't need part of my loan, & was told to put it into a high interest account.

It was suggested to start with an 'annual ISA' at a building society, but I am unsure of how these work really.

I approached several building societys and in their ISA application forms are usually written something like this:

I apply to subscribe for a Mini Cash ISA For the Tax Year:
6th April 2007 - 5th April 2008 /OR/ 6th April 2008 - 5th April 2009

What would happen if I applied now (in September) would I not get interest until April 2009? What would happen to my money from now until April 2008?

why don't they teach us this stuff at school? :mad:

Any suggestions on high interest accounts would be much appreciated!

splatter01

Hi

Basically, with an isa you can put up to £3000 cash in it in a tax year. For you that means if you open one for this tax year, you can put up to £3000 in it now, get interest on it in april and on the 6th april put another £3000 in!

Not sure specifically which bank / building society is currently highest, but i have one with nationwide which is quite high and natwest i believe is also high in interest.

Definatly open one this year for you student loan but have a quick shop around 1st to find the one with the highest interest!

Clive

redpete

ISAs are targeted at people who pay tax - they are a government-approved way of avoiding paying tax on savings. I doubt you will be paying income tax whilst in full-time study so you can look at any savings account, not just ISAs. If you open a non-ISA account make sure you fill in the building society or bank form that says you are a non tax-payer - otherwise they will deduct tax automatically.

There's a section on this site on the best paying savings accounts. Current best rates are on ICICI or Bradford & Bingley accounts. Both these allow you to take out your oney whenever you need it with no penalty.

You probably want to look for one that gives instant access to your money with no penalty. If you are certain you can do without the cash for a period
then you might get higher interest e.g. on a 1-year term account but this does mean you lock all you're money away for the year.

Interest is usually paid annually but this is not a problem unless you need the income. You can get it paid monthly in some accounts but usually at a slightly lower interest rate.