ISA Transfer Service or Manual BACS?

jonil93

Hi all,

I opened a Help-to-Buy ISA in September 2019 with £1000 and I've been paying in £200 every month. This will mature this September and it will receive 2.25% tax-free interest. I've also recently set up a Lifetime ISA with Moneybox and opened the account with £1. The interest rate is very poor, so I was planning on transferring the balance from my Help to Buy ISA shortly after the interest is paid, then topping it up to £4000 so I'm eligible for the maximum government bonus when the tax year changes. My question is, Moneybox have an ISA transfer service, but I don't see why I need to use it. I can withdraw from my Help to Buy ISA with no penalties, so why would I bother using the Moneybox transfer service? I also wonder if the transfer service would result in my Help to Buy ISA closing? Would there be any problem with withdrawing my Help to Buy ISA balance after the interest is paid, adding it to my LISA and topping it up before the tax year changes, and potentially doing this for one or two more years in a row?

Thanks in advance,

Joni

masonic

The only reason to use the transfer service is to preserve more of your £20,000 ISA allowance for 2020/21. If you don't wish to do this, you can just withdraw and pay the money into your LISA. It will almost certainly be quicker to do the latter.