Help to buy ISA 4%

Thrugelmir

MatthewAinsworth wrote: »

I think 4% as a maximum isn't that great if rates rise, and im disappointed that the 25% isnt added straight awar to earn interest, if its the best option go for it, or you could just dump the money in as late as poss to get the 25%

Read the scheme rules then you'll know what's possible and what isn't. For many FTB's who aren't lucky enough to be gifted any money. It gives them a long term incentive to save. To achieve a dream. Most importantly it reinforces the discipline of regular saving.

colsten

veryintrigued wrote: »

Probably telling you to suck eggs but looking at the blurb you need to be a minimum of 16.

I hope the parent looking for a 4% JISA interest rate for their child/ren isn't younger than 16

masonic

colsten wrote: »

There is no obligation to buy a house but

1. I believe you need to sign a declaration that you are an FTB when applying for the HTB ISA
2. the amount you can deposit is relatively low. You can put a total of £800 into 6% Regular Saver accounts, and from next April, probably get the interest tax free

I must admit, the 4% rate has turned this into a bit of a dilemma for me. I thought the available HTB ISAs would all have poor rates to make up for the free money being added to them, but it seems I was wrong.

Assuming I don't buy (or don't take out a mortgage if I do buy), the 6% regular savers should probably take priority (even though I will pay some tax on my interest). A 4% ISA becomes very attractive in preference to 5% and 4% accounts, at least until I can shovel enough money into a couple of IF ISAs to shelter enough of my P2P interest to drop below £1,000 savings interest. And at the end of the day, I have the option to grab some free money should circumstances permit.

colsten

Difficult/impossible to comment on individual circumstances without know your precise details.

It would be fair to say that, presently,

1. most people who qualify for HTB ISAs and intend to buy a property to live in would be mad to pass on the HTB ISA
   
2. those eligible, once they have exhausted the HTB ISA allowance, would be ill advised to put any additional money into any other cash ISA
   

Futuristic

Are people who already opened a cash ISA this year out of luck? I am assuming they'd have to wait till April next year

colsten

Futuristic wrote: »

Are people who already opened a cash ISA this year out of luck? I am assuming they'd have to wait till April next year

If you never paid into any cash ISA this financial year, you can proceed to deposit into an HTB ISA.

If you did make a deposit into a cash ISA this year, regardless of when you opened that ISA, waiting until April might be the easiest option by far. Although there are options to legally also deposit into an HTB ISA this financial year. If you are one of those affected, please post the exact details of your existing ISA arrangements - or ask your HTB ISA provider of choice. Although the staff of the providers often don't know the rules.

Futuristic

colsten wrote: »

If you never paid into any cash ISA this financial year, you can proceed to deposit into an HTB ISA.

If you did make a deposit into a cash ISA this year, regardless of when you opened that ISA, waiting until April might be the easiest option by far. Although there are options to legally also deposit into an HTB ISA this financial year. If you are one of those affected, please post the exact details of your existing ISA arrangements - or ask your HTB ISA provider of choice. Although the staff of the providers often don't know the rules.

Thanks just wondering if it might be worth it to wait till April, was looking to open HSBC account for the 6% saver and the ISA £120 offer.

masonic

Futuristic wrote: »

Thanks just wondering if it might be worth it to wait till April, was looking to open HSBC account for the 6% saver and the ISA £120 offer.

The worst case opportunity cost of taking out the ISA with Save Together (if you think you can beat the deadline) is 25% x £200 x 4 months you are unable to deposit the money into a HTB ISA. That works out at £200, so if you end up buying in 2 years or less, that's how much Government money you might lose out on. But if you are not planning to buy in that timeframe, you might be better off waiting.

savings_my_hobby

Futuristic wrote: »

Are people who already opened a cash ISA this year out of luck? I am assuming they'd have to wait till April next year

I would hope that Halifax does not slash its rate by April'16. I think it is a variable rate anyway. More likely the others will raise their rate to compete.

colsten

Halifax have for years had the best interest rates for cash JISAs and kids regular savings accounts. It didn't encourage others to raise their rates for comparable accounts. But they might have experienced "sticky" customers, i.e. those who stay with them as very profitable borrowers after they had accounts with them for years.