Help to buy ISA with an old cash isa with over 1200 in it

latro666 · 16 January 2017 at 2:23PM

Hi there

My partner and myself are looking at saving for a house.

I have a cash isa (opened years ago) with say 10k in it and i have paid into it since April 2015 with HSBC

Just have a question. I realise I can open the HTB isa and pay 1200 into it then 200 a month after that and cannot pay into the current cash isa.

But what happens to that cash isa? can i just leave it there with 10k in it to gain interest and pay into the HTB isa (with any extra savings paid into normal savings account) or do i have to move all the money from the cash isa and close it?

eskbanker · 16 January 2017 at 3:01PM

latro666 wrote: »

I have a cash isa (opened years ago) with say 10k in it and i have paid into it since April 2015 with HSBC

Have you paid into your existing cash ISA since April 2016? If not, then go ahead and open a HTB ISA, but if you have then you'd need to close it (or at least transfer/withdraw current year funds) before opening a HTB ISA.

See http://www.moneysavingexpert.com/savings/help-to-buy-ISA#cashisa and https://www.helptobuy.gov.uk/help-to-buy-isa/faq/#de8e24ea-e1f7-648f-8ce9-ff0000ad17aa

latro666 · 16 January 2017 at 3:47PM

I have yes. Oh so i'd only need to transfer current year added to?

So i could keep it if i put in say 2k this year and 8k in the past? Just needing to take the 2k out.

eskbanker · 16 January 2017 at 8:19PM

Yes, the general cash ISA rule is that all current year subscriptions have to be in the same place, but as per that linked MSE article there may be a difference between HMRC's rules and what the banks will actually do.

However, in your shoes I'd actually close the cash ISA down entirely anyway as it'll be on a derisory interest rate, so you'd get far more return on your £10K in some taxable current and/or regular saver accounts, see http://www.moneysavingexpert.com/savings/savings-accounts-best-interest. Open the HTB as well though, the 25% bonus is pretty unbeatable....

latro666 · 16 January 2017 at 11:38PM

Thanks for the info, but am i missing something the interest rate on my savings account is 0.05AER my ISA is 0.5AER with HSBC, surely that's a drop in interest moving from ISA to savings account no?

eskbanker · 17 January 2017 at 12:49AM

Yes, you're missing the availability of accounts paying 3-6% elsewhere, as detailed in that link....

Help to buy ISA with an old cash isa with over 1200 in it

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