Help to Buy ISA guide

jimjames

Why use a cash ISA, split or otherwise when you can get vastly more outside an ISA? Obviously HTB is worthwhile but not others if you're saving for a property

WLITC

jimjames wrote: »

Why use a cash ISA, split or otherwise when you can get vastly more outside an ISA? Obviously HTB is worthwhile but not others if you're saving for a property

Okay I'm a bit clueless with all this saving stuff. I'm planning to save at least £1000 a month for the next 18 months. £200 of that will go into the HTB ISA and then I need to save the other £800 else where. Should should I just get a high interest savings account? Is the argument that the interest rate is higher and therefore it will nulify the tax saving of an ISA?

Tob3z

Hi there,

I have a couple of questions.

I opened up a ISA with Natwest years back. In this tax year I have paid in about £1,800 and that's currently what's in the account.

I have now opened the Halifax ISA and set it to take £1000 from my Natwest ISA.

Am I also correct in saying I can transfer £200 this month as well? Would I just set up a direct debit on say my current account to transfer £200 every month? Then I leave the £800 in the ISA or move it to somewhere better to make more interest?

I keep seeing that you are not able to open and pay into more than one ISA each tax year. Does this mean I am now allowed to pay into the HTB ISA yet and have to wait? Or is the rule "you are now allowed to OPEN and pay in".

I think I'm just a little confused about my current ISA and what I am allowed to do right now.

Notapro

Hey guys just some information regarding 'Split ISAs' This isn't a product which is available, the rules state that you may pay into both a cash ISA and a help to buy ISA during the same tax year provided both products are held with the same provider and that you do not exceed the maximum £15,240 in deposits across all ISA's you hold. The term 'Split ISAs' simply refers to holding both a cash ISA and a help to buy ISA with the same provider. Not all providers will enable you to do this however.


Thank you

Archi_Bald

Tob3z

You need to close your Natwest ISA now. You should have closed it before opening the Halifax HTB ISA but you'll probably still be ok closing it now.

Given the amount involved, there's no point in making any ISA transfer arrangements. Just close the ISA, and may be put the remaining £800 into a new TSB PLus account, which you can also use for any extra savings, up to £2,000, you might have. Then set up an SO for your monthly payments from your current account.

Notapro

Tob3z

You only need to close this ISA if you have subscribed into it during this tax year, if that £1800 was deposited during a previous tax year then there is no obligation to close this account. Also you can deposit £1200 into your help to buy ISA during the first calendar month of opening the account.

Archi_Bald

Notapro wrote: »

Hey guys just some information regarding 'Split ISAs' This isn't a product which is available, the rules state that you may pay into both a cash ISA and a help to buy ISA during the same tax year provided both products are held with the same provider and that you do not exceed the maximum £15,240 in deposits across all ISA's you hold. The term 'Split ISAs' simply refers to holding both a cash ISA and a help to buy ISA with the same provider. Not all providers will enable you to do this however.

This is true but as has been mentioned countless times, having a split ISA means that you will not be getting the best interest rates that you can get.

For the normal ISA, your rates will be 3-4 times less than the best rates available for cash holdings.

For the HTB ISA, your rate will be 50% of the best rate available.

If you are a First Time Buyer who needs every penny, I would have thought you'd be after the best possible rates.

Archi_Bald

Notapro wrote: »

You only need to close this ISA if you have subscribed into it during this tax year

Which they have, so therefore they must close that ISA.

Tob3z wrote: »

In this tax year I have paid in about £1,800 and that's currently what's in the account.

Tob3z

Archi_Bald wrote: »

Tob3z

You need to close your Natwest ISA now. You should have closed it before opening the Halifax HTB ISA but you'll probably still be ok closing it now.

Given the amount involved, there's no point in making any ISA transfer arrangements. Just close the ISA, and may be put the remaining £800 into a new TSB PLus account, which you can also use for any extra savings, up to £2,000, you might have. Then set up an SO for your monthly payments from your current account.

Hi thanks for your quick reply. I'm not in a position to open a current account at the moment as I'm having ID issues due to a name change and lack of passport.

Would my best option be to transfer the remaining £800 over to my current account, close the account and then get the £800 moved over to a TSB account in the new year?

Notapro

Archi Bald, true though there's no way you could get a better return than the 25% bonus offered with the help to buy ISA long term unless you took your savings to the casino and put them all on black