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Help to Buy ISA - about to reach the maximum. What to do next?
Locksley2020
Posts: 2 Newbie
Hi there,
I opened a Help to Buy ISA nearly 5 years ago and have paid the maximum £200 in each month. I probably should have moved it into a LISA at the opportune time but missed that boat as far as I understand it. I am hoping to buy my first property later this year, possibly next year. However I've realised that it will reach £12k in the next couple of months and that is the maximum amount the government will pay the bonus on.
The thing is, there is a very good interest rate on the ISA than is currently available elsewhere. So,
1) Will I be able to continue to save into the ISA beyond £12k and at the same interest rate? If so, can I then put more than £200 in each month, such as up to my annual ISA allowance this year and then hypothetically the same again in the next tax year? I realise that I would still only get the 25% bonus on the £12k maximum when I did purchase though, so if I had done that, would I have to withdraw the balance over £12k prior to closing the account and passing on to my conveyancer or would it not make a difference?
Or 2) will the interest rate be triggered to reduce once I pass £12k? In which case would I be able to cease the monthly payments in and make withdrawals in order to maintain the balance at just under £12k so that I can continue to get the current interest rate until I buy?
Presumably there are people who have encountered this before. Any help would be much appreciated.
Thank you.
I opened a Help to Buy ISA nearly 5 years ago and have paid the maximum £200 in each month. I probably should have moved it into a LISA at the opportune time but missed that boat as far as I understand it. I am hoping to buy my first property later this year, possibly next year. However I've realised that it will reach £12k in the next couple of months and that is the maximum amount the government will pay the bonus on.
The thing is, there is a very good interest rate on the ISA than is currently available elsewhere. So,
1) Will I be able to continue to save into the ISA beyond £12k and at the same interest rate? If so, can I then put more than £200 in each month, such as up to my annual ISA allowance this year and then hypothetically the same again in the next tax year? I realise that I would still only get the 25% bonus on the £12k maximum when I did purchase though, so if I had done that, would I have to withdraw the balance over £12k prior to closing the account and passing on to my conveyancer or would it not make a difference?
Or 2) will the interest rate be triggered to reduce once I pass £12k? In which case would I be able to cease the monthly payments in and make withdrawals in order to maintain the balance at just under £12k so that I can continue to get the current interest rate until I buy?
Presumably there are people who have encountered this before. Any help would be much appreciated.
Thank you.
0
Comments
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To a certain extent it depends who your account is with - most continue to pay the same interest rate above £12K but HSBC, for example, doesn't and pays a negligible rate above that. Check the Ts & Cs of your account and if it pays the same rate above £12K, keep going with it, otherwise save the excess elsewhere....0
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But you can't pay more than £200 per month into your HTB ISA!1
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Thank you both for clearing that up. It's with Virgin Money and it appears the same interest rate continues (for now) so I will continue to pay just the £200 in each month.0
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