H2B ISA and last years ISA?

FreakShow!

So, I want to open a H2B Halifax ISA, to get that 4%.

I have a Post Office ISA from the previous tax year, currently earning 1.5%. It is almost full (so around £15k). I can open the Halifax ISA without touching that money, but I'd like to get the best rate for all of my money. Can I transfer the Post Office ISA to the Halifax and get the 4%?

eskbanker

No, unlike other ISAs, there are tight limits on what you can put into HTB products (£1,000 up front then £200 per month regardless of this being new or previous year money), which is why Halifax can offer a generous headline interest rate, knowing that their exposure is limited....

FreakShow!

I see. So what happens to my old ISA at the Post office? If the rate on that drops, can I transfer to another provider with that money? Or is it stuck there until I pull it out to something else?

MARTYM8`

FreakShow! wrote: »

I see. So what happens to my old ISA at the Post office? If the rate on that drops, can I transfer to another provider with that money? Or is it stuck there until I pull it out to something else?

In terms of your original question you would be able to transfer £1k from your Post office ISA to fund the initial lump sum under the terms for the Halifax’s help to buy isa. However your first and subsequent £200 monthly payments must be new funds (e.g. from your bank account or another non ISA savings account).

So you cannot keep transferring £200 in a month from the post office under the Halifax terms to fund your HTB isa.

Several providers – Natwest, Nationwide, Newcastle BS and Aldermore for example – allow you to invest in a cash isa and a help to buy ISA in the same tax year.

One option would be to open a flex direct (paying 5% if you pay in £1000+ a month – which you can withdraw the same/next day) or flex plus current (packaged) account with the Nationwide and then you could transfer your post office funds into NW’s 1.6% flexclusive instant access ISA – that’s more than you get now.

If you do a current account switch (two DDs needed) and get referred by a friend with a Nationwide current account and open the current account via top cashback or quidco you could get £180 cashback and the person referring you gets £100.

You would also be eligible for the new NW 5% regular saver (non ISA) on up to £500 a month and could also open their 2% help to buy isa and if you wish invest your full cash isa allowance for 2015-16 (up to £13,440 net of the £1800 you can pay into the HTB isa this year) via the 1.6^ flexclusive isa.

This as a package (e.g. 5% on flexdirect on £2.5k, 5% regular saver on up to £500 a month plus up to £180 cashback on opening current account and the 2% on their HTB isa) may be worth more than the 4% you get from the Halifax on their HTB isa?


One option – but there are others!

Bodders11

That seems like a great option. I also have a Post Office Isa that I have paid in to this year and have a current account with Nationwide so seemingly opening a H2B Isa with Nationwide would be the best option.

My girlfriend is with Halifax but I'm likely to refer her to Nationwide to open one too and hopefully benefit from the promotion they are currently running when referring someone.

jimjames

Bodders11 wrote: »

That seems like a great option. I also have a Post Office Isa that I have paid in to this year and have a current account with Nationwide so seemingly opening a H2B Isa with Nationwide would be the best option.

My girlfriend is with Halifax but I'm likely to refer her to Nationwide to open one too and hopefully benefit from the promotion they are currently running when referring someone.

Unfortunately missing out that nugget of information completely changes the options available. You cannot open a HTB ISA if you already have a cash ISA this year.

It's even better if you're a couple with the nationwide refer scheme. You could get £400 from it if you refer each other.

MARTYM8`

jimjames wrote: »

Unfortunately missing out that nugget of information completely changes the options available. You cannot open a HTB ISA if you already have a cash ISA this year.

It's even better if you're a couple with the nationwide refer scheme. You could get £400 from it if you refer each other.

That is not correct - if your cash isa and help to buy isa is with Nationwide, RBS/Natwest, Aldermore or Newcastle BS you can invest in both in 2015-16. This is because they offer split ISA wrappers.

Your advice is only correct if you invest your HTB isa with any other provider - at present.

Its all very complicated - for a product supposedly targeted at what might generally be the most inexperienced/younger investors.

http://www.nationwide.co.uk/products/savings/help-to-buy-isa/features-and-benefits

(You can contribute to another Nationwide cash ISA product at the same time, as long as you don't exceed your total ISA tax-free savings allowance each year.)

http://personal.natwest.com/personal/savings/isa-overview/help-to-buy-isa.html

http://www.aldermore.co.uk/personal/personal-savings/easy-access-help-to-buy-isa/

http://www.newcastle.co.uk/savings/help-to-buy-ISA.aspx

Remember the saying: if it looks too good to be true maybe it actually is true!

FreakShow!

@MartyM8, So are you saying I should pull my money out of the post office and stick that money in various other saving products?

I have the £1200 that I can invest into this new scheme ready, I don't need to take it from the Post Office ISA.

colsten

MARTYM8` wrote: »

Its all very complicated - for a product supposedly targeted at what might generally be the most inexperienced/younger investors.

Sadly it is a bit complicated for those who decided to put any money into a cash ISA this year, instead of into non-ISA accounts that pay several times the amount of interest. Although I think the "self repair" mentioned in other threads could come to the help of those willing to investigate it.

For others, it's all very straight forward.

MARTYM8`

FreakShow! wrote: »

@MartyM8, So are you saying I should pull my money out of the post office and stick that money in various other saving products?

I have the £1200 that I can invest into this new scheme ready, I don't need to take it from the Post Office ISA.

Not giving advice. Merely that there are other options that earn more interest as I have suggested - plenty of other banks with high interest current accounts/regular savers (e.g. TSB pays 5% and has a 5% regular saver).

Cash isas paying 1.5% may be worth it for higher rate taxpayers - for basic rate taxpayers there are better options particularly given the £1000 annual tax free allowance for non isa savings interest coming in from April

Be careful about going overboard with current account applications if you are about to take out a mortgage - as too many in one go could affect your credit rating.

FreakShow!

Yes, obviously not legal/official advice. Don't worry, I'm not going to sue you if I do something stupid

I already have Santander, Lloyds Club, Halifax, Nationwide saver. I've a meeting with Halifax on Friday, so I'll hold off opening one for a few days and get what I can and can't do from the horses mouth as it were.

I think the next thing I can do is raid the ISA and fill up Bank of Scotland accounts to get their 3%. If I can't do anything with my ISA money of course.