ISA account

krnthmsn_2

My daughter starts college in August and we want to open an account we can put money into each month, does any one know if we would be best with a saver account or an ISA. She doesn't have an ISA at present.
Thanks

bryanb

If she's a non tax payer, no difference at present. If she's likely to leave the money long term (until she is a tax payer) the ISA would keep tax free status that could be useful in years to come. Most students spend it though!

Blacksheep1979

If she's going to be taking money out then an ISA is a waste of time as you're limited to wha tyou can put in each year. If not it's far better than a standard savings account if she's likely to meet/exceed her tax allowance.

oliverp_2

I'm pretty certain student loans and grants can only be paid in to current accounts rather than saving accounts.

A current account would allow for debit card and a lot greater flexibility.

Lokolo

Ok she is planning on putting money in each month.

How long does she want to keep the savings for? For after uni? For rainy day?

Blacksheep - when did she say she was going to be taking out

oliverp - student loans can be paid into current accounts but then can be transferred to savings account like any other money.

bryanb - exactly! good thinking lad! if she is wanting to keep the savings for a number of years after uni, she would be getting tax free interest on money even when she is a tax payer.

krnthmsn_2

Thank you all for your replies. I am looking for an account which some money will come out of, probably each month. Reading through some of the other posts I will need to look for a savings account.

Blacksheep1979

Lokolo wrote: »

Blacksheep - when did she say she was going to be taking out

When did she say she wasn't and didn't you notice my if there? Fair chance that a student will dig into their savings...

Lokolo

Blacksheep1979 wrote: »

When did she say she wasn't and didn't you notice my if there? Fair chance that a student will dig into their savings...

How do you know this? :P I got my student loan and haven't touched it Thats why I then asked.

Now she has confirmed she is going to be taking some out monthly so personally I would recommend a regular savings account and fill in an R85 form as I doubt she/he will be earning over personal allowance.

CLAPTON

She could benefit by

a. current student a/c preferrably give an interest free overdraft.

b. a savings a/c for money going in and out... if the money is being moved regularly it may be beneficial to have one linked to the current a/c as transfers will be immediate. (the transfer rules between banks are due to be changed soon but I wait to see what actually happens)
They may not give the best interest rates but the convenience may counteract that.
Make sure she fills in a R85 to get interest gross.

c. an cash ISA for money she expect to keep for a long time.

see should review the a/c every so often