Too much in Help to but ISA

sparkiemalarkie

Hi I have over £14000 in a Halifax Help to buy ISA
£12000 is earning 1%
£2,000+ is earning 0.05%
Can the excess be taken out without jeopardising the ISA? 
If so what is the best way to 'remove' the excess? It doesn't need to keep the ISA wrapper as there are not enough savings to exceed the £1,000 psa

tia

sx

eskbanker

You can remove the £2K+ surplus without jeopardising the HTB ISA status of the £12K, just follow the withdrawal instructions on the account if you don't wish to transfer it to another ISA.

Depending on when you're likely to buy, it may be advantageous to transfer the lot over to a LISA (which can earn more in bonuses and has a higher property value cap), but this can only be done at £4K/year....

sparkiemalarkie

Thank you, I'll take a look.

sx

Bridlington1

If you decide to stick with a H2B ISA then depending on when you intend to buy, it may be worth moving slightly more than £2k out of it. Let's say you wanted to buy in 1 years time. As the interest rate of the H2B ISA is easily beaten elsewhere, leave £9.6k in the H2B ISA and transfer the rest into a higher interest savings account, then transfer £200 back into the ISA each month until it's back up to £11.8k. Then just as you're about to use your H2B ISA transfer the remaining £200 into it to get the full bonus.

sparkiemalarkie

Bridlington1 said:

If you decide to stick with a H2B ISA then depending on when you intend to buy, it may be worth moving slightly more than £2k out of it. Let's say you wanted to buy in 1 years time. As the interest rate of the H2B ISA is easily beaten elsewhere, leave £9.6k in the H2B ISA and transfer the rest into a higher interest savings account, then transfer £200 back into the ISA each month until it's back up to £11.8k. Then just as you're about to use your H2B ISA transfer the remaining £200 into it to get the full bonus.

Brilliant thank you!
I was just thinking about skimming off the extra above £12000. Your plan makes far more sense.
I'll take a look at the LISA first, before making any money moves.

thanks

sx