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You might look into a CD. Then you get slightly higher yield than a savings account, but can get your money out within a year or two depengind on what kind you get.
As a fellow college student, I don't see much benefit of $1K in an IRA. I tried a low input IRA and it has sat ungrowing during these past 4 years. What a joke. After inflation, I have lost money. You won't be able to touch it for another ~40 years without penalties.
1K might be better off as an emergency account or used to pay down credit cards or student loans. What are your current loans' APR's? If you are borrowing at ~4%, your interest earnings would be astronomical if you were earning anything close to that right now--so, at best, your earnings would cancel out.
If you try and invest it on the market, chances are your capital will be eaten alive by fees. Washington Mutual will waive fees for IRA's, but only if you agree to let them manage your money for at least 5 years. I think the minimum investment was 2K.
If you want to start an IRA, I think you would be better served to slice out a certain percentage of your income that you will not miss every paycheck--say, $25 each check.
So, I think the priority goes:
1. pay down credit cards
2. pay down loans
3. secure emergency savings account
4. secure high interest savings (CD's, etc.)
5. secure long-term retirement
6. play the market when, or if, you come up with a sizeable lump sum
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