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HTB ISA - Ditch Or Keep
drlabman
Posts: 326 Forumite
My son has a Halifax HTB ISA currently paying 3.5% interest - he's asked me whether he should ditch it and do something else with the money. I think I know the answer but I'd just like someone to confirm for me that I'm not missing anything. Given the interest rate, I think it's a no-brainer to keep it even if he doesn't make any more contributions. Am I wrong in thinking that, even if he didn't want to use it to buy, it's just the best (or one of the best) savings accounts around. And, I'm pretty sure it's instant access.
Give a man a fish, and he will eat for a day. Teach him how to fish, and you’ll get rid of him every weekend.
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Comments
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What does he have in mind?My son has a Halifax HTB ISA currently paying 3.5% interest - he's asked me whether he should ditch it and do something else with the money.
If he's looking for instant-access savings at a decent rate then 3.5% is competitive, although can be beaten for smallish amounts with Nationwide FlexDirect and/or some regular savers at 5%.
However, he may be thinking of investing (for a longer term) or, at the other extreme, spending it!0 -
H2B is instant access but contributions are capped at £200 a month so if you take out, say, £1000 you can't put all that back in in one go, it would have to be drip-fed over five months.
But of course 3.5% is fairly good compared to what's out there now, it's a legacy deal, doesn't count towards your PSA and personally I'd just keep feeding it until something better comes along.
The other school of thought: If your son has maxed that H2B ISA out, ie got it when it first came out and fed it the initial £1200 and then £200 every month since it'll now hold just over £5k. Where else at this point in time are you going to get 3.5% on a £5k lump sum?0 -
Cheers. I think it's a keeper.Give a man a fish, and he will eat for a day. Teach him how to fish, and you’ll get rid of him every weekend.0
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Fair point. I was just looking for confirmation that keeping the HTB was a good idea and that there weren't any gotchas. He's asked me for advice. Whether he takes it or not is up to him, obviously.
Actually, I need to ask another question re HTB ISAs. Is it possible to contribute to a HTB ISA and a S&S ISA in the same year (within the limits for the year)?Give a man a fish, and he will eat for a day. Teach him how to fish, and you’ll get rid of him every weekend.0
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