Advice needed on a savings account

bloophead

I am currently a student and do not generate a steady income. I basically have a lump sum of about 5k, of which I will need money from every month. However, rather than letting this money sit in a current account for a long period of time, I would much rather it worked for me in some way or another.

I will be needing not more than 600 pounds every month which would cover all my expenses.

I realise that this topic must be covered many times a day, but I hope you experts out there can help me. What are my options? I have read most of the savings articles on this website but am not savvy at all on the issue. So I apologise in advance once again if I sound ignorant!

Thanks!!

Reaper

Normally a cash-ISA is suggested as a starting point for savings. However as a student I assume you are below the income tax threshold so you don't need one.

Instead I suggest you open a normal savings account. Egg, for example, are an internet based savings account paying 5.5% and you can ask them to transfer money to your bank account whenever you want via their web site (the transfers are by BACS so they normally take about 3 working days).

You should tell them you are a non-tax payer and they will give you an R85 form to fill in. Returning this means that you will be paid interest tax free. Fail to do this and basic rate tax will be deducted.

Note that the Egg interest rate will drop after 6 months. If you don't want to keep moving to the latest promotion then you might want to look at alternatives. See this article for more info. But whover you decide to save with don't forget to tell them you want the interest paid to you tax free.

bloophead

Thank you very much kind sir.

Concerning the tax forms, I would be exempt from the taxation considering I am an international student yes?

Once again, thank you for your advice.

Robert_Sterling_3

You would not be exempt from taxation because you are a student. You would probably be exempt because you have little income.

Reaper

I imagine you are living in the UK for most of the year and therefore subject to UK tax.

During the year you are allowed to earn up to £4745 before you have to start paying anything. This figure includes interest from savings accounts as well as jobs.

As long as you do not expect to earn that much you should ask them to pay you the money tax free.