What is the best investment option for Uni Student?

mazibee

My daughter has just started Uni in Sep 2020.

She has got £3000.00 in her saving HSBC account. (saving interest is in pennies)

She wants to make make good use of her money investing in some good option,

She wants to save money for her higher studies and her first home and also want to keep some cash for daily use and emergencies

She also plans to put some regular monthly savings in as she doing a HCA bank job (when she has got time)  Approx £300 to £400 from the job and sometime more depending upon how many days he can spare.

Please can someone suggest some options

Thanks in advance.

Albermarle

The most obvious option to consider first would be a LISA>.
https://www.moneysavingexpert.com/savings/lifetime-isas/

csgohan4

emergency fund first then savings next. Lisa cannot be accessed until you want to buy a house or at aged 60

mazibee

Albermarle said:

The most obvious option to consider first would be a LISA>.
https://www.moneysavingexpert.com/savings/lifetime-isas/

Thanks for your reply, we have looked at  it , but as said by csgohan4, she can only use the amount for her first home or at the age of 60, so she plans to open it before Dec 2020. so that clocks start ticking.

csgohan4 said:

emergency fund first then savings next. Lisa cannot be accessed until you want to buy a house or at aged 60

Thanks for our reply.

If she invests in LISA  and need the to withdraw money later,  she has to pay the penalty which 6.25% which obviously will reduce he initial capital.

Both she and we the parents are confused as how to start and from where to start.

csgohan4

mazibee said:

Albermarle said:

The most obvious option to consider first would be a LISA>.
https://www.moneysavingexpert.com/savings/lifetime-isas/

Thanks for your reply, we have looked at  it , but as said by csgohan4, she can only use the amount for her first home or at the age of 60, so she plans to open it before Dec 2020. so that clocks start ticking.

csgohan4 said:

emergency fund first then savings next. Lisa cannot be accessed until you want to buy a house or at aged 60

Thanks for our reply.

If she invests in LISA  and need the to withdraw money later,  she has to pay the penalty which 6.25% which obviously will reduce he initial capital.

Both she and we the parents are confused as how to start and from where to start.

Penalty will be more than 6.25%

https://www.moneysavingexpert.com/news/2020/05/lifetime-isa-withdrawal-penalty-reduced-due-to-coronavirus/

steampowered

I would probably keep the money in a savings account rather than investing it. Your daughter may want access to this money in the short term during her degree.

The amount of interest you would get on £3000 in a savings account is so small that it is not worth worrying about.

I wouldn't put it into a Lifetime ISA because then it is effectively locked away until she buys a house - there is a penalty if you wish to withdraw for another purpose. Also you don't get the bonus if the price of the house is more than £400,000 which is not enough if she gets a high paying job in London and wants to buy there.

I'd just take an account with a convenient bank which offers good perks to students. Perhaps Monzo or Revolut.

In the longer term your daughter could consider a stocks & shares ISA or Lifetime ISA, but only do that with money which she is happy to lock away for a few years.

Albermarle

It seems that everybody has raised  all the negative points with a LISA but put the positive bit to one side.
That is for every £1000 the government gives you £250 free !
and the OP said this 'She wants to save money for her higher studies and her first home'

xylophone

There is no reason why she cannot have both a LISA and an ordinary savings account so why not make a  start on both?

https://www.moneysavingexpert.com/savings/lifetime-isas/

https://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

csgohan4

Albermarle said:

It seems that everybody has raised  all the negative points with a LISA but put the positive bit to one side.
That is for every £1000 the government gives you £250 free !
and the OP said this 'She wants to save money for her higher studies and her first home'

Depends on how much emergency fund she needs, 3k in the grand scheme of things may not last long for some people, especially if needed for a deposit for renting, career investment like courses, training e.t.c

Albermarle

csgohan4 said:

Albermarle said:

It seems that everybody has raised  all the negative points with a LISA but put the positive bit to one side.
That is for every £1000 the government gives you £250 free !
and the OP said this 'She wants to save money for her higher studies and her first home'

Depends on how much emergency fund she needs, 3k in the grand scheme of things may not last long for some people, especially if needed for a deposit for renting, career investment like courses, training e.t.c

Yes you are right, but I still think the LISA option was not getting a fair hearing .
I have a younger family member the same and when a LISA is suggested , she always trots out the same negative points mentioned in this thread whilst conveniently forgetting the very generous benefit .
There is probably a name for it , like negative bias or something . Or looking a gift horse in the mouth maybe. 
Xylophone has the right idea - mix and match .

csgohan4

Albermarle said:

csgohan4 said:

Albermarle said:

It seems that everybody has raised  all the negative points with a LISA but put the positive bit to one side.
That is for every £1000 the government gives you £250 free !
and the OP said this 'She wants to save money for her higher studies and her first home'

Depends on how much emergency fund she needs, 3k in the grand scheme of things may not last long for some people, especially if needed for a deposit for renting, career investment like courses, training e.t.c

Yes you are right, but I still think the LISA option was not getting a fair hearing .
I have a younger family member the same and when a LISA is suggested , she always trots out the same negative points mentioned in this thread whilst conveniently forgetting the very generous benefit .
There is probably a name for it , like negative bias or something . Or looking a gift horse in the mouth maybe. 
Xylophone has the right idea - mix and match .

I accept the positive behind LISA, but we don't know the extent of what they need for their emergency fund and at that age, having an emergency fund would be prudent. Locking your savings away is not the best. But a mix and match would be reasonable