I live in the UK, and am just starting a 4-year PhD programme. My living expenses are funded by means of a tax-free stipend of £16,553 per year, paid in quarterly instalments of £4138.25.
To help with budgeting, I would like to pay myself a monthly income from this stipend. My question is about where would be best for me to store these lump sums of £4138.25 from which I will pay myself an income.
I live in an expensive city, and my budget is fairly tight, so I would like to avoid scenarios where I could potentially lose some money from this stipend. For this reason I have ruled out investing my stipend in funds. (Is this a wise decision?)
The remaining options I have come up with are to invest my stipend in either a Cash ISA or a high-interest savings account.
If I were to go for a Cash ISA, I think I would have to choose an 'easy access' ISA, since my regular withdrawals would result in fairly severe penalties if I were to invest in a higher interest fixed-rate ISA. The best easy access Cash ISA I can find is from Charter Savings, and offers 1.1% AER, which can be paid monthly.
If I were to go for a high-interest savings account, I would be limited by the fact that my deposits in the account would only be made quarterly, which would exclude some of the higher rate accounts that require monthly deposits to be made. The highest rate savings account I could find that I would eligible for is also from Charter Savings, and offers 1.26% AER, which can be paid monthly. However, this rate does not include a bonus, so could fall in the future.
My instinct is to go with the Cash ISA, since, although it does offer a slightly lower interest rate, this rate is guaranteed.
Question: Is there a better way for me to invest my stipend for payment of a monthly income than in a Cash ISA?