HTB ISA withdrawal rules

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hi,

i just wanted to before i go ahead with it plan to open a HTB ISA with halifax who are offering 4% tax free on a 1k deposit plus £200 per month which is rather good for interest...

im unlikely however to put a deposit down the next few years so likely would just withdraw in a year and move on to the next best thing.. i cant see anything that states you can not do this and just wanted to confirm before i apply?

many thanks

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  • diamonds
    diamonds Posts: 6,048 Forumite
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    You lose the government 25% bonus you would have gained.

    Nationwide give 5% upto £2500 on a current account for 12 months.
    SO... now England its the Scots turn to say dont leave the UK, stay in Europe with us in the UK, dont let the tories fool you like they did us with empty lies... You will be leaving the UK aswell as Europe ;)
  • Darksparkle
    Darksparkle Posts: 5,465 Forumite
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    diamonds wrote: »
    You lose the government 25% bonus you would have gained.

    Nationwide give 5% upto £2500 on a current account for 12 months.

    You wouldn't lose the bonus, the minimum you would need to put in to get the bonus is £1,600. That would give you £400 bonus.
  • Flobberchops
    Flobberchops Posts: 1,279 Forumite
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    I read the OP as meaning, can the HTB ISA just be used as a regular savings account. The answer is yes, that's fine, and you can get a fairly decent rate (4%). However if the money is removed from the HTB ISA and not used to buy a house, you miss out on the bonus 25%.
    : )
  • Darksparkle
    Darksparkle Posts: 5,465 Forumite
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    I read the OP as meaning, can the HTB ISA just be used as a regular savings account. The answer is yes, that's fine, and you can get a fairly decent rate (4%). However if the money is removed from the HTB ISA and not used to buy a house, you miss out on the bonus 25%.

    Perhaps the OP can confirm then as they mention not putting down a deposit for a few years.

    They could transfer the help to buy ISA to another one with a better offer if they are planning on using it to buy a house.
  • vouch0r
    vouch0r Posts: 205 Forumite
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    edited 4 April 2016 at 9:17AM
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    Hi,

    i already have 5% CAs, thus looking to move onto the next step savings accounts that pay a good rate for now.. maybe in the future i would consider a mortgage but currently looking just for the best interest rates for the money.

    i have a HSBC save together cash isa thats paying £10 per month as a save together bonus.. do these payments count as deposits for the new tax year when it starts?

    edit: found it: Our additional interest payments will not contribute towards your annual ISA allowance.
  • Pesto2606
    Pesto2606 Posts: 53 Forumite
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    Hi all just thought I'd tag on to this thread rather than start a new one,

    I'm just about to start saving in to a HTB ISA and wondered whether there is any value at all in me opening one today or whether to wait until after the 5the April? I will have the £1200 in a couple of days to fund the account but wondered if there was any benefit in doing it in this tax year or next??

    Thanks
  • colsten
    colsten Posts: 17,597 Forumite
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    It doesn't really matter in the scenario you describe. You'd get 13p interest per day on £1,200 if you go for one of the 4% ISAs, so a few days either way don't matter. The HTB ISA is all about the bonus, which is accrued by calendar month. So as long as you get started with £1,200 in April, there's no rush to do it today or tomorrow.
  • jimjames
    jimjames Posts: 17,676 Forumite
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    You wouldn't lose the bonus, the minimum you would need to put in to get the bonus is £1,600. That would give you £400 bonus.
    vouch0r wrote: »
    im unlikely however to put a deposit down the next few years so likely would just withdraw in a year and move on to the next best thing..

    It seems fairly clear that the OP would not qualify for a bonus. If they withdraw and move on to next thing without buying a property then they get 4% and nothing else.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • Pesto2606
    Pesto2606 Posts: 53 Forumite
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    colsten wrote: »
    It doesn't really matter in the scenario you describe. You'd get 13p interest per day on £1,200 if you go for one of the 4% ISAs, so a few days either way don't matter. The HTB ISA is all about the bonus, which is accrued by calendar month. So as long as you get started with £1,200 in April, there's no rush to do it today or tomorrow.

    Great! Thanks for the clarification.
  • Westie983
    Westie983 Posts: 5,213 Ambassador
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    You wouldn't lose the bonus, the minimum you would need to put in to get the bonus is £1,600. That would give you £400 bonus.

    The bonus is paid straight to the solicitor when buying a property so you wouldnt get the bonus if you are not purchasing a home, but you can withdraw the money you have paid in and get the 4% on your own money.

    Its not meant to be used as a savings vehicle, but to encourage people to save for a deposit when they move into their first home.
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