Dump H2B into Premium Bonds?

jamiecalver

Hi there! So long story short, I opened a H2B ISA in December 2018 and maxed it out with £1400 base payment and £200 every subsequent month. I also recently opened a Premium Bonds account, chucking £300 in it a month. I also have a Lifetime ISA which I chuck £335 in a month. 

I kept the H2B open because it had a really good interest rate (2.25%) which was much better than all the other savings accounts I could find that I could withdraw from without fees. I moved back in with parents to save for a mortgage and this is when I opened my lifetime ISA. 

I’m 20. I plan to buy before 25. My question is, with Coronavirus tanking all the interest rates (H2B is now down to 0.1%), is it worth dumping my entire H2B ISA (£2630) into my Premium Bonds and subsequently add £500 into my premium bonds instead? I do not see the interest rates recovering and obviously putting triple the value of my PBs into them will increase my chances of winning drastically. 

Long story short, corona tanked my interest rates. Is it worth closing it and just having premium bonds and a lifetime ISA?

masonic

Yes you should ditch the HTB ISA if the interest rate so low, and you intend to use your LISA to buy your first home. However, I'm unconvinced premium bonds are your next best option. A fixed term savings account could fit the bill depending on your circumstances, or a high interest regular saver, etc.