Funding a Help to Buy

60camraman60

My student daughter has just opened a HTB ISA (2.6% variable) with the intention of funding by drip feeding it from a savings account. Now she has realised, by being a savvy saver, all her savings are in an Instant Access ISA paying 0.2%. Obviously losing 0.2% isnt going to break the bank especially as it will be going into the HTB ISA almost immediately but do I assume that the best way to do it is to open a basic current account and put enough in it from the isa for say 12 month (£2400) and drip feed the HTB by Direct Debit over the year and then do the same the following year till her ordinary ISA runs out.
Any other suggestions welcome, but nothing too complicated.

eskbanker

A basic current account is unlikely to offer interest - there are interest-paying current accounts available but these may not be readily available to a student.

Why not just put all the ISA money into an easy-access savings account, the best of which are on a par with the best-paying cash ISAs?

And recommend that she spends time researching for herself on here - if she thinks that leaving money in a 0.2% account is being a savvy saver then she has plenty to learn!

60camraman60

Thanks Eskbanker. The 0.2% was my fault. Only just noticed. Long story.
Although she is a student now she may well be working in the next 12 month and will then become a tax payer so wouldn't she still be better off keeping most of her money in an ISA to future proof it. OK, not at 0.2% but get a better deal in a Fixed Term (say 1 yr) ISA, then after the year end take out another £2400 and switch, if need be, the remaining ISA to a better deal.

The best Easy access savings via mse is Tesco at 1.3% and the best Instant Access ISA is Nationwide at 1.3%. Wouldnt Nationwide be the best bet?

eskbanker

60camraman60 wrote: »

Although she is a student now she may well be working in the next 12 month and will then become a tax payer so wouldn't she still be better off keeping most of her money in an ISA to future proof it.

She'll have a personal savings allowance of £1,000 worth of interest before she'd pay tax on it and there's no need to future proof it if it's just a temporary holding account from which to drip-feed into the HTB.

However, there's no harm in using the Nationwide ISA rather than the Tesco saver, both are much of a muchness in the circumstances....

60camraman60

Thanks for the advice "esk". This money saving lark ain't as easy as it looks!!!