Help to Buy Isa and other Cash Isa's

ConsistentlyLost

Hi Folks!

I've had my Help to Buy Isa for nearly 7 years now and it's the only Isa I've ever had. I stopped saving into it around February of last year and withdrew the money in excess of the £12000 due to the low interest rate earned on the amount above that. Now I know at the time I was actively saving into the account that it wasn't possible to have another Isa and save into them but since then I've become more knowledgeable about savings thanks to this forum in the last couple of years or so however, I'm considering opening the Virgin easy access isa and saving into that instead as the interest rate is rather good. My question is can I do this? I wouldn't want to jeopardise my help to buy isa at this stage when I'm hoping to purchase a home next year.

TIA for any advice.

eskbanker

If you haven't paid into your HTB ISA this tax year (and don't plan to do so) then you're free to pay into a different cash ISA, which doesn't jeopardise your HTB one in any way.

Too late now if you're buying next year, but if you'd switched from HTB ISA to Lifetime ISA when the latter were launched in 2017 (or plenty of opportunities since), you'd have been able to benefit from the 25% bonus on significantly more than £12K....

ConsistentlyLost

eskbanker said:

If you haven't paid into your HTB ISA this tax year (and don't plan to do so) then you're free to pay into a different cash ISA, which doesn't jeopardise your HTB one in any way.

Too late now if you're buying next year, but if you'd switched from HTB ISA to Lifetime ISA when the latter were launched in 2017 (or plenty of opportunities since), you'd have been able to benefit from the 25% bonus on significantly more than £12K....

Thank you Esk! I mean I've been trying to buy since last year but hoping next year may provide a better chance. I wasn't aware of the Lifetime Isa until I started reading these forums in 2020 and have been debating whether to open one ever since. I think I decided against the Lisa in the end just in case I never get to buy a property.

ConsistentlyLost

Hi Folks! I have decided to open the easy access flexible cash isa with Virgin after all as that rate is very good. One question I have now it's open. I know the interest is paid annually in December and reading the terms it appears that the interest is paid directly into the isa but my question is, how does that work with the £20000 isa allowance? I assume the £20000 only refers to the money that I deposit into the account myself and the interest that is paid in which takes me over the £20000 balance isn't taken into consideration. I would then just withdraw the interest immediately after it's paid in.

TIA!

eskbanker

£20K is the annual contribution limit - interest subsequently earned on that money isn't measured against that in any way....