HTB ISA open now or in April?

kllk_2011

If you have paid into a Nationwide ISA this financial year unless you withdraw/transfer the ISA money am I right in thinking you either open the HTB ISA with Nationwide or you can wait until April and chose any of the other providers?

Assuming interest rates don't change you could get 2% with Nationwide now or 4% with Halifax in April? Is the interest calculated monthly? So in two years the additional 2% interest rate by waiting until April would be £140.... therefore would be better to open 2% one now to benefit from the additional £200 if you were looking to move out in the shorter term?

Am I correct!?

colsten

You can find the answer to your first question in the Help to Buy ISA Guide thread.

All interest in any interest paying account is calculated daily, based on the daily closing balance.

I haven't checked your numbers, but it goes without saying that 4% is better than 2%, and the earlier you start saving, the sooner you will earn interest.

kllk_2011

Thanks, I appreciate 4% is the better one but if you have opened a Nationwide ISA this year unless you withdraw it you would have to wait until April to open it with Halifax? So therefore, I think the £200 bonus you would get between Dec-Mar 16 surely outweighs the foregone additional 2% interest you'd get by waiting for April - unless you weren't planning to move out for a couple of years?

colsten

You appear to have missed the oft-mentioned point that there isn't any point really in a normal cash ISA. But never mind.

kllk_2011

I completely understand the point and certainly haven't missed that point - and it is something I will be looking in to but I'm just trying to understand the rules & regulations surrounding ISA's first for my own knowledge.

It will be something I will be looking into but haven't had a chance to yet so looking for short term solutions. Never mind.

Gordon_the_Moron

You can't open a 4% H2B ISA with Halifax until April, nothing you can easily do about that if you have already contributed to a cash ISA this year as they don't allow splits (you'd have to close it or transfer to stocks and shares and start again)

If you fancy being clever here is what to do:

Open a H2B ISA with Nationwide now (assuming you haven't maxed your allowance this year in the Nationwide ISA) pay in £1200 followed by £200 per month up to April (make sure the April contribution goes in BEFORE the 5th or after the next step)

After the beginning of the new tax year transfer the H2B from Nationwide to Halifax (once the new tax year starts you are allowed to split last year's contributions) and the cash ISA to wherever pays best.

Save £200 per month in the H2B at 4% until March 2017.

Anything else you save from April 16 to March 17 put in a top paying savings/current account for the time being as Halifax won't let you split.

In March 2017 transfer the H2B ISA to a provider like Nationwide that allows splits and top up your cash ISA allowance if you need to. After the start of the following tax year transfer back to Halifax and do it again ...

Obviously this plan, so cunning you could fry an egg on it, relies on the fact that Halifax stays the top payer, if that changes, reconsider!