What to do with 2 old ISA's - Want to apply for a Help to Buy ISA

SteelSeries

Hi,

I've been very poor with my ISA maintenance. Since setting two up a LONG time ago, I've since left them to do their thing not checking back on the interest level. I now see that the two ISA's I have with Halifax and AA are giving just 0.25% interest. My own fault.

I want to apply for a Help To Buy ISA (which I understand will be the only ISA I can open this year), probably the Halifax 4%. So with that in mind, would it be best to cut my loses with the old Halifax and AA ISA's by withdrawing them and sticking them in the highest interest saving account I can find until April when I can open another new Cash ISA?

Many thanks

eskbanker

SteelSeries wrote: »

would it be best to cut my loses with the old Halifax and AA ISA's by withdrawing them

Yes

SteelSeries wrote: »

sticking them in the highest interest saving account I can find

Yes, use current accounts paying 3-5% interest, unless it's significantly over £50K you're talking about.

SteelSeries wrote: »

until April when I can open another new Cash ISA?

No! Just leave the old money in the above accounts after April too, except for the £200 per month you pay into the HTB ISA.

colsten

SteelSeries wrote: »

..... until April when I can open another new Cash ISA?

As long as you contribute to an HTB ISA at Halifax, you cannot also contribute to another cash ISA in the same tax year. If you wanted to put money into a cash ISA alongside putting money into the HTB ISA, you would need to take both of them out at a split-ISA provider such as Nationwide. The interest rates for both will be much lower than you can get elsewhere.

Best to just do the Halifax HTB ISA, and putting the rest of your money into one or more of the best current accounts.

Eco_Miser

Since the ISAs are old, presuming you've not added to either since 6 April 2015, you are allowed leave them alone, and just open the HTB ISA. Also if you take the money out of the ISAs you won't be able to put it back in an ISA while you are adding to the HTB ISA. You could do an ISA transfer at any time if you really wanted to.

However, if you are a Basic Rate Taxpayer, you won't be taxed on the first £1000 of interest anyway after April this year, and, as eskbanker pointed out, you can get 3%-5% in current accounts, so having a cash ISA, other than a HTB ISA, is absolutely pointless for almost everyone.

SteelSeries

Thank you very much for the responses.

I haven't contributed to the ISA's in this tax year (or the last I think :S), so providing Halifax will let me, I should open a separate HTB ISA now for the excellent rate. Then after April X, move the money from the old ISA's into a high rate paying current account.

I know you can get bonus's for switching your current account provider. Is "switch" classed as the account that receives my work income, or can you still get the bonus's by setting a standing order to regularly deposit £XXX every month?

jimjames

SteelSeries wrote: »

Thank you very much for the responses.

I haven't contributed to the ISA's in this tax year (or the last I think :S), so providing Halifax will let me, I should open a separate HTB ISA now for the excellent rate. Then after April X, move the money from the old ISA's into a high rate paying current account.

I know you can get bonus's for switching your current account provider. Is "switch" classed as the account that receives my work income, or can you still get the bonus's by setting a standing order to regularly deposit £XXX every month?

Absolutely no need to wait till April. Close the old ISAs asap so you get the best rates as soon as you can. You can switch any account that meets the criteria, it doesn't need to be your main account