Cash ISA in new tax year with old HTB

matofender

Hi

I'm sure this question has probably been asked before but I have searched and can't find an answer.

I opened a HTB ISA in Feb (so last tax year) and was going to open a Cash ISA, but obviously I'm still contributing to the HTB ISA £200/mo.

Some websites state that you can't open one of each in the same tax year and other websites state that you can't contribute to one of each in the both tax year. If the latter is correct then obviously I won't be opening a Cash ISA. I'd be grateful if someone could confirm which (or of both) is correct. Thanks.

jimjames

Contribute is the key word.

Question is why you want to use a cash ISA if you're saving for a house deposit when you can get such vastly better rates elsewhere?

planteria

yes, the HTB ISA would be the best use of your further ISA funds, would it not?

colsten

Consider (converting your HTB ISA to) the LISA from April onwards.

Chapuys

You’re not supposed to have both a Help to Buy ISA and a cash ISA in the same tax year. However...

Nationwide and a few others have found a loophole which other providers are not using yet. Nationwide allow both a Cash ISA and a Help to Buy ISA as a 'split ISA'. I'm currently transferring across to access these.

http://www.moneysavingexpert.com/savings/help-to-buy-ISA

8. You’re not supposed to contribute to a Help to Buy ISA and a cash ISA in the same year, but…

The rules say you can’t open a cash ISA and a Help to Buy ISA at the same time in the same tax year. Though nothing prevents you opening a Help to Buy ISA if you have cash ISAs from previous years, or a stocks & shares ISA from any year.

Yet there is a way round this. Five providers allow ‘split ISAs’ – here they manipulate the rules to put the Help to Buy ISA and a cash ISA together in the same wrapper, effectively allowing you to have both. Remember, your maximum ISA allowance per tax year is £15,240 so your combined ISA savings (the amount you put into an ISA) can't exceed this.

Doing this is great for those who've already opened a cash ISA this tax year, as you can transfer it in and use some for Help to Buy. If this works for you see the top pick Help to Buy ISA split below.

The only negative for doing this is you may get lower rates on both your Help to Buy ISA and cash ISA by linking them together. If this isn’t for you it’s worth remembering while a cash ISA lets you save more, getting a Help to Buy ISA still beats it as the 25% state-added bonus is far bigger.