Lifetime ISA interest rates

vikki243

I have a Lifetime ISA and have read that savings interest is possibly going down into negative. I have money in my ISA and need help understanding what will happen if the interest does drop below 0. 

grumiofoundation

Where have you read savings accounts will be offering negative interest rates? 

Even if the BOE sets -ve interest rates unlikely consumer savings accounts with ‘normal’ amounts of money will be -ve. 

In the event the interest rate on your account did go negative, you would pay the bank to hold your money. 

Anyway lifetime ISA still offers 25% top up.

Mick70

on a similar note ,  the rates do seem to be even lower than normal savings accounts, which seems odd ?
are any providers offering a fair rate ?

grumiofoundation

Mick70 said:

on a similar note ,  the rates do seem to be even lower than normal savings accounts, which seems odd ?
are any providers offering a fair rate ?

Only a few providers offer cash Lifetime ISAs so would expect less competition over rates. 

Moneybox offers 1.1%variable  for new customers with a fixed 0.6% bonus.
Newcastle 1.05% variable. 

These are basically the same as normal savings accounts so not really sure what you see as a fair rate?

https://www.moneysavingexpert.com/savings/lifetime-isas/


The lifetime ISA offers up to £1000 a year of government money - assuming you are saving to buy a house (otherwise stocks and shares LISA is more suitable for retirement) really this is what matters not the interest rate. 

Mick70

the interest rate will make little difference , providing you are getting the full annual govt bonus - think of that as a 25% int rate ?

eskbanker

Mick70 said:

the interest rate will make little difference , providing you are getting the full annual govt bonus - think of that as a 25% int rate ?

For the avoidance of doubt, there is no annual government bonus, there is a one-off bonus paid for each contribution.  If a LISA holder is making annual contributions then that could be said to amount to the same thing, but there was one recent poster under the impression that they'd literally receive 25% annually as an interest rate, so best be clear when suggesting thinking of it in those terms....