asak
what am i required to do with the money i get as interest in my student bank account?
jazak Allah
The best is to leave the accumulated interest in your account and not touch it.
If you are particular about this issue, then change your bank account type to checking account (and not savings account), so you don't receive any interest at all. Many scholars agree that a haraam income can not be justified by even giving it away as charity.
On the other hand, there is a major difference of opinion, amongst muslim scholars whether modern day commercial interest is similar to riba as defined and prohibited in Quran and ahadeeth. To the best of my knowledge, scholars of Al Azhar University (Egypt) permitted it, and some scholars in Pakistan forcefully prohibit it. Federal Shariat Court in Pakistan declared this interest as riba, but the Supreme Court cancelled that decision. There is no consensus of opinion on this issue.
So, at the end of the day, each of us has to make our determination, based on our own research, as to which opinion has better evidence to back it up. Its not simple, mind you. :)
what u get from the bank is interest....
dont give it any other name....
if u have no way to avoid that bank account, take the interest and give it off as charity, ofcourse expecting no sawaab for it cuz its not ur money....
i doubt u have islamic banks in ur place so no need to suggest to move to one....
Dear sister Faatma,
It is far better, if at all possible, to transfer your bank account to a non-interest based account.
As brother armughal has said, the interest generated from your account can be given to charity, although this action shall not be rewarded, as Shaikh Munajid answers in reply to a similar question that was asked of him. I've copied his response below for your benefit insha'Allaah:
Question:
Can we give the interest from banks to the needy one?
Answer:
Praise be to Allaah.
If there is a person who deals in riba (interest/usury), then repents and wants to get rid of the money he gained from riba, it is permissible for him to give it to the poor in order to get rid of it. A person can also do likewise if an amount of riba is put into his account by the bank, but this is not counted as sadaqah (charity), because Allaah is Good and only accepts that which is good and pure. As for continuing to deal in riba, this is not permissible, because it is one of the major sins (kabaa’ir), and taking it is tantamount to challenging Allaah and His Messenger, even if one is dealing in riba in order to give it to the poor.
Islam Q&A
Sheikh Muhammed Salih Al-Munajjid (www.islam-qa.com)
... and Allaah knows best.
WasSalaam
"No leaf falls except that He knows of it, and no rain drop forms except that He has willed it."
jazak Allah for ur replies 
:k: very helpful :k:
Fateema 
I urge you to check this article LINK if you can .Its by an ex Ambassador of Pakistan & with many references for credibility .
Although its one of the most asked topic in Islam,it remains confusing & unanswered for most of us .
However i read a discussion in related field & you can check this Pakistani Discussion forum for your self on this topc of Interest free banking ,which you can EXTRAPOLATE to your case
http://chowk.com/bin/showa.cgi?ahsani_aug0197
Hope you find it usefull
Sis, leave it in the account to compound annually for a few years, then turn around and put the accumulated interest into a money market CD for another few years, then when u retire, live off the interest and leave the principal in Trust for your cat or granddaughter or both.