High Interest Savings

[looneych00n]

Hi, im a student (but im not entitled to any loans bursaries etc) as Im doing a second degree. I have a student bank account with an interest free overdraft. someone has suggested that i withdraw up to the limit of the overdraft and invest it in a High Interest Savings Account, and "live" off the interest. Does this sound too risky? or is it a common practice?

[EverClean]

It is done but to "live" off the interest would mean a very high overdraft. If you have a �10,000 with an interest rate of 5% a year then you will get roughly �10 a week.

[bednobs]

as above ... most student accounts only have about a 2000 pounds overdraft i have 6000 pounds in a high interest account and get about 20 pounds interest a month therefore i would deduce on 2000 quid it would be about 7/8 quid a month. Good luck living on that then!]
To answer your question fully it is not risky,if its just a savings account because if you needed the money, you could get it back. and i think it's fairly common to do that

[dancecaller]

My daughter put her student loan into a high interest account, and lived partly on overdraft, partly what we gave her.
She found the bank would not have been happy for her to just withdraw the full overdraft in one go, they used to send letters asking when money would be paid into the account