Paying into a HTB ISA and cash ISA

katies_mum

My daughter has a Help to Buy ISA which currently stands at £14,000 and is paying 4.7% with Yorkshire BS.  She is aware that she only needs to hold £12,000 to get the benefits when she buys a house.  We were wondering if now the rules have changed regarding paying into ISA`s if she would be able to put £17,000 into a cash ISA as in the past she could only pay into the HTB account.   Thank you

eskbanker

The short answer to your question is 'yes', i.e. the revised ISA rules applicable from this tax year do allow funding of multiple ISAs concurrently, which wasn't previously permitted for the same type.

Worth double checking that interest rate though - HTB ISAs have been withering on the vine over the last few years since being withdrawn from sale, and are generally paying pretty poorly, but 4.7% would be an amazing rate!

There's no point funding an HTB ISA beyond £12K as it won't earn any government bonus above that amount, so it would make more sense for her to be funding a market-leading cash ISA instead, such as those paying over 5%, for the excess, as well as the other £17K.

masonic

There is no longer any restrictions on the number of cash ISAs you can pay into within the same tax year, so she can spread her allowance between her HTB ISA and another cash ISA.

katies_mum

Thank you both for taking the time to reply, much appreciated.  She checked last night and her Yorkshire Help to Buy is currently 4.7% but she is expecting the rate to reduce in the near future. She has a Paragon ISA currently 4.87% which she keeps transferring to get a better rate but has not paid into it since having her HTB.  She will put her money in there.   Please could I ask if the HTB account still needs funding each month (with a small amount) or can she just forget about it until she looks for a property?    Thank you

eskbanker

katies_mum said:

Please could I ask if the HTB account still needs funding each month (with a small amount) or can she just forget about it until she looks for a property?

This should be made clear in the product Ts & Cs - the ones that are visible online don't make any mention of minimum monthly funding but then again they also state that the interest rate is 2.3%!

https://www.ybs.co.uk/documents/productdata/Factsheet-YB560288B.pdf

A minimum monthly funding requirement for HTB ISAs would be unusual though....

katies_mum

Thank you, we checked her account last night and it was showing as 4.7%.  Have just looked at rates on the Yorkshire BS website and HTB Isa £1+  4.7%  /  £20,000 + £4.6%  these are changing to £1+ 4.5% and  
£20,000+  4.4% on the 10 December 2024.   She transferred to them from Virgin in October 2023 after a really good rate being posted on MSE.

I can`t seem to find anything either about a minimum monthly funding amount.   Thank you again for your help