Help to Buy ISA - is it worth switching?

RobertLeoTucker

Hi there,

I got myself a Natwest Help to Buy ISA just before the deadline to apply and I chose Natwest just because I had a previous account with them, but their new interest rate is 2.00% AER (1.98% tax-free p.a). I have researched that I am able to change providers for my ISA as long as the other provider accepts me. I think the best interest rate is still Barclays at 2.07% AER (2.05% tax-free p.a).

Is this interest rate big enough of a difference to want to switch, especially if I have the account for its entire lifetime of 10 years?

Is Barclays still the best interest rate on offer?

And how easy would it be to switch if I don't already have a Barclays account?

Robert Leo Tucker

eskbanker

I don't believe that the Barclays HTB ISA is available to new applicants, even those simply wanting to transfer in from another HTB ISA, hence https://www.barclays.co.uk/savings/isas/help-to-buy-isa/ stating

Can I transfer-in from another ISA?

Yes, you can transfer-in using Online Banking, Telephone Banking (0345 744 5445 1) if you’ve registered for these services, or by visiting a branch. You’ll need to have opened a Help to Buy: ISA with us by the deadline of 30 November 2019.

RobertLeoTucker

eskbanker said:

I don't believe that the Barclays HTB ISA is available to new applicants, even those simply wanting to transfer in from another HTB ISA, hence *link* stating

Can I transfer-in from another ISA?

Yes, you can transfer-in using Online Banking, Telephone Banking (0345 744 5445 1) if you’ve registered for these services, or by visiting a branch. You’ll need to have opened a Help to Buy: ISA with us by the deadline of 30 November 2019.

Thank you for the reply. I wonder if that line on their website means more about open to new people without a help-to-buy ISA as it doesn't say that Barclays HTB is closed to everyone. There is still a possibility for people to switch providers, but I was wondering which HTB ISAs are open to switching still?

eskbanker

RobertLeoTucker said:
I wonder if that line on their website means more about open to new people without a help-to-buy ISA as it doesn't say that Barclays HTB is closed to everyone.

That's not the way I read it, given the reference to having to have opened a HTB ISA with us by November 2019.

RobertLeoTucker said:

There is still a possibility for people to switch providers, but I was wondering which HTB ISAs are open to switching still?

The MSE article lists a few at https://www.moneysavingexpert.com/savings/help-to-buy-ISA/#bestbuys although omits Halifax, which was mentioned as a possibility on another thread.

margaretx9

eskbanker said:

RobertLeoTucker said:
I wonder if that line on their website means more about open to new people without a help-to-buy ISA as it doesn't say that Barclays HTB is closed to everyone.

That's not the way I read it, given the reference to having to have opened a HTB ISA with us by November 2019.

RobertLeoTucker said:

There is still a possibility for people to switch providers, but I was wondering which HTB ISAs are open to switching still?

The MSE article lists a few at https://www.moneysavingexpert.com/savings/help-to-buy-ISA/#bestbuys although omits Halifax, which was mentioned as a possibility on another thread.

Problem is who knows how rates will move by provider - as there are fewer transfer options left.  
Once you have moved - and they cut their rates - there may only be worse options to move too in future as many providers won't open new accounts to allow transfers such as Nationwide. Halifax as you say pays marginally less than HSBC (0.05%) - based on their new lower rates from next month -  but pays that interest on balances over £12k (which some early HTB isa openers will have reached now).

1.7% on £14k with Halifax is better than £1.75 on £12k and nothing on £2k with HSBC. Bearing in mind anyone already with a HTB isa can keep paying £200 a month in in theory for another 10 years that will become an even greater gap over time!

vermania

margaretx9 said:

eskbanker said:

RobertLeoTucker said:
I wonder if that line on their website means more about open to new people without a help-to-buy ISA as it doesn't say that Barclays HTB is closed to everyone.

That's not the way I read it, given the reference to having to have opened a HTB ISA with us by November 2019.

RobertLeoTucker said:

There is still a possibility for people to switch providers, but I was wondering which HTB ISAs are open to switching still?

The MSE article lists a few at https://www.moneysavingexpert.com/savings/help-to-buy-ISA/#bestbuys although omits Halifax, which was mentioned as a possibility on another thread.

Problem is who knows how rates will move by provider - as there are fewer transfer options left.  
Once you have moved - and they cut their rates - there may only be worse options to move too in future as many providers won't open new accounts to allow transfers such as Nationwide. Halifax as you say pays marginally less than HSBC (0.05%) - based on their new lower rates from next month -  but pays that interest on balances over £12k (which some early HTB isa openers will have reached now).

1.7% on £14k with Halifax is better than £1.75 on £12k and nothing on £2k with HSBC. Bearing in mind anyone already with a HTB isa can keep paying £200 a month in in theory for another 10 years that will become an even greater gap over time!

That page seems to be out-of-date, as Buckinghamshire Building Society dropped their rate to 1.75% in January, and it's dropping again on 6 May to 1.2%. Also, looking at the HSBC website, I'm not sure it's available any more (similar wording as seen on Barclays) but the paper transfer forms are still accessible on the website.

I would concur with your strategy of continuing to pay in, if the rates are good - but having mulled it over, with a closed and diminishing market the banks who continue to offer it will probably give less generous rates than other accounts. That's only an opinion, we shall see...