Renewing an ISA and Help To Buy ISA

lamialex

Official MSE Insert:

You may also find our fully researched Help to Buy ISA guide helpful.

Back to the original post...


Hello,

I have an instant cash ISA with Halifax, they have sent me a letter saying that the rate would now be 0.5% tax free/AER
But I could get a better rate by renewing it:
http://www.halifax.co.uk/isas/options-for-existing-customers/convert/

I still need an instant cash ISA so the best rate I could get is 1% tax free/AER

BUT I am considering a Help To Buy ISA in Autumn so I know I must not put money in this account or open another ISA account but does renewing my ISA to a better rate would also void the possibility of opening a HTB ISA this autumn?

I have tried to read all the articles about ISAs on this website but it is so confusing!!!
Thanks for the help

masonic

Providing you don't need to add any more money this tax year, it would not be a problem. I'm sure you can find better rates elsewhere if you were to transfer it.

If it needs to be instant access (and therefore you presumably will be needed in the short term), have you considered a high interest current account as an alternative. After tax it still might pay more.

lamialex

Thank you for this.
No I didn't even think of a high interest bank account! didn't even know they existed!

lamialex

At the moment I have £4K and hoping to keep it at least that minimum for the year and saving more in it hopefully. Should I go for a Santander 123 current account? I don't want a fixed cash ISA and I don't want to open a new instant cash ISA so I will need to stay with HALIFAX which only gives me 1% AER at best.
I have the Halifax current account at the moment which gives me £5/month.
All those numbers and choices are make me feel dizzy!!!
Thank you

Also what does this mean:

"Yet there is a way to get the best of both. Put your cash in the Santander account earning 3%. Then, a week before the tax year ends around the end of March, shift the cash out of the bank account to an ISA. That way you get the short-term high rate from the banks, but you still get the permanent tax-free benefit of your ISA allowance."

jimjames

Ignore that advice from MSE.

For £4000 you can't get a better rate than Tsb and Nationwide that pay 5% on up to £4500.

lamialex

On MSE I can only find the TBS bank account that gives interest on up to £2000 and the Nationwide that gives interest on up to £2500.
I can't see the ones up to £4500

masonic

lamialex wrote: »

On MSE I can only find the TBS bank account that gives interest on up to £2000 and the Nationwide that gives interest on up to £2500.
I can't see the ones up to £4500

You open one of each. This allows you to set up standing orders from one to the other in order to fulfil monthly funding requirements.

jimjames

lamialex wrote: »

on mse i can only find the tbs bank account that gives interest on up to £2000 and the nationwide that gives interest on up to £2500.
I can't see the ones up to £4500

£2000+£2500 = £4500

lamialex

Haha! I see! Very clever!