Help To Buy ISA help

lmeghani

I currently have an HTB ISA open, where I've been adding my monthly deposits. My plan is to purchase a house first to put on rent before I purchase a house for myself to live in, I'm aware that you can't use your HTB ISA to purchase a house to then put on rent, and that the house you purchase with the HTB you have to live in yourself. Is it worth me getting rid of my HTB ISA, collating my savings, and putting them in a cash ISA? I'm aware I'll be unable to use it when I do purchase myself a house to live in as I'll already be on the property ladder. Does anyone recommend having a cash ISA?

eskbanker

If you're not going to be able to access a bonus from your HTB ISA then it's unlikely that it would be worth saving in a non-HTB cash ISA, as they typically pay worse interest rates than taxable accounts and most won't pay income tax on savings interest anyway, due to the personal savings allowance.

If your HTB ISA is still paying relatively respectable interest then you can stick with it until you're a property owner and then at that point withdraw the money and put it into whatever savings account pays the best net return - at the moment NS&I's premium bonds are competitive but other options are explained at:
https://www.moneysavingexpert.com/savings/which-saving-account/
https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

lmeghani

Is it worth me opening a Lifetime ISA instead of having a HTB ISA?

eskbanker

lmeghani said:

Is it worth me opening a Lifetime ISA instead of having a HTB ISA?

No obvious reason to do so, as it has essentially the same condition as HTB about incentivised use only for first-time buying, although you can benefit from the 25% bonus if you don't access the money until you're 60.

lmeghani

With the HTB ISA you're only allowed to deposit £200 per month, if I were to move all my savings into the HTB ISA would it affect the interest rate at all?

eskbanker

lmeghani said:

With the HTB ISA you're only allowed to deposit £200 per month, if I were to move all my savings into the HTB ISA would it affect the interest rate at all?

Depends what the Ts & Cs of your specific account are and how much you're talking about - HSBC pays less interest above £12K, for example.