PDA

View Full Version : investing interest free overdraft

blx
27-05-2007, 02:04 PM
ok, you'll have to bear with me as I honestly don't have a clue about finance...

I came up with this idea - basically I wanna know if it would work

I'm starting university in September (for the second time after a bad start last year). It occurred to me that many student bank accounts offer totally interest-free overdrafts for the time that you are studying. I consider myself to be quite good with money (having never gone overdrawn before) and I thought perhaps I could put this overdraft that I am being offered to good use - would it be easy enough to take out the entire overdraft (probably about £1,500) and place it in a high interest savings account for the duration of my 3-year course? Obviously if I got into financial difficulties I could then withdraw the funds again

:chin: It's probably a lot more complicated than this or people would have done it before. But from what I can see, it's money for free

Anyone got some tips?

cheers
Sa-ra-ra-ra
27-05-2007, 03:50 PM
Sounds like a good idea, to be honest - as long as you can afford it and you won't dip into the money you've taken out then it's pretty safe.
Mushroom Boy
28-05-2007, 11:45 AM
some people do that, and they also pay their SLC loan into a high-interest account too. there isn't really anything wrong about it, but the bank can refuse to allow you to take all the money out in one go, and the bank may do if you look like you're ripping them off. the overdraft is a privilege of the account, not a right, and the bank may refuse to lend you the money.
CheeseOnToast
28-05-2007, 11:50 AM
Yeah it's a good idea, get it done.

Get into a good regular savings account IFWU (A&L are good @ 12%)
ShyBoy
28-05-2007, 12:48 PM
Yea I did that. Won't make millions but you could get maybe £500 at the end of your course if you max out an ISA.
CheeseOnToast
28-05-2007, 02:32 PM
Regular savers accounts at 7%+ are better than all the Cash ISA's currently available.
Scary Monster
28-05-2007, 05:14 PM
Yup, works quite well.
Randomgirl
28-05-2007, 05:46 PM
I did this, kept the current acount fairly overdrawn but kept "savings" in an ingdirect account. Lots of students do this.