Squirreling money away in a savings account may not be high on your list of priorities when studying at college or university.
The cost of higher education, as well as keeping up with the social side of student life, can leave most students running up debts rather than saving for the future. However, placing just a small amount aside each month can make a big difference in the long run, especially if you are hoping to buy your first car or pay for a deposit on a flat.
Thinking of building up a fund? Then get searching for the right account! Some providers offer accounts designed specifically for students, while others offer flexibility with making deposits and withdrawing cash.
Here is a student's guide to opening a savings account.
• Consider what type of account best fits your lifestyle.
Firstly, decide how often you will need to access your money. An account that allows limited access to money may not be suitable if you think you will need to make regular withdrawals, so in this case you might want to consider an easy access account.
Remember that some accounts can hand out penalties such as loss of interest to savers who access their money without giving the bank or building society advance notice, while most fixed rate bonds strictly prohibit any withdrawals during the term, so these will only be suitable for those who are really confident they won't need access to their cash.
Also, look at how you want to operate your account. If you spend most of your time online, an internet-based account could be a wise choice. If you opt for a branch-based account, find out the location of your nearest branch, particularly if you are reliant on public transport. Many students like to open an account with a provider that's got a branch on campus, so if you favour face-to-face banking and want extra convenience, it's a good idea to check out the available banks near you.
• Look at how much money you can invest and how often.
Most accounts allow savers to invest a minimum of just £1 as often as they like, although some may require larger lump sum deposits. Take a look at your budget and decide what works best for you.
If you are tempted by the competitive rates paid on regular savings accounts, be aware that many require a set number of fixed deposits per year. Failure to meet the conditions can often result in penalties such as loss of interest or even account closure.
In short, always check what the investment terms are before opening an account to ensure it offers the degree of flexibility you need.
• Save as much money as you can on a regular basis.
Try to get into the habit of putting some money aside each month.
If you have a part-time job to fund yourself through college or uni, then work out a budget. Putting any extra cash you may have, even a spare tenner, into a savings account is better than nothing!
Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.
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