Using my Help to Buy Isa (3.5% Rate) as an easy access savings account?

deceapog · 6 December 2019 at 5:47PM

Hi All,

First time poster here!

I am about to open a LISA, as want to start saving for my first home. I historically had a Help to Buy Isa, (Have a pound in it currently) but this Help to Buy ISA is with Virgin Money and has an interest rate of 3.5% which is quite good - Better than my everyday savings account (1.5%).

Is it worth using the Help to Buy effectively as an everyday savings account (Paying in £200 a month), and to open a Stocks & Shares LISA instead? (as i know you can't pay into 2 cash isas in one tax year)

Would I be able to withdraw my savings in the Help to Buy when the time comes.. say in 4 or 5 years time, and transfer it to my Everyday Savings account/ Current account?

Or should I just forget the Help to buy ISA and focus on using a Cash LISA and just save through my regular savings account...

Any advice would be much appreciated! Thanks in Advance

SamJ35 · 6 December 2019 at 6:09PM

You might be pleasantly surprised to know that a Cash LISA is not regarded as a Cash ISA but instead a completely different type of ISA.

You can therefore do exactly as you said, use your VM H2B ISA like an easy access account. But you can open a Cash LISA as well (more preferable over S&S if you are looking for a house purchase within the next few years).

You can save into both in the same tax year (200pm into the H2B, and 4000 into the LISA). Definitely do not forget the H2B at that interest rate!! You can then just withdraw the cash from your H2B ISA, penalty free, when you purchase a property, without claiming the bonus (because the bonus will apply to your LISA).

Hope that helps. Let me know if you need anything clarifying.

deceapog · 6 December 2019 at 6:12PM

You might be pleasantly surprised to know that a Cash LISA is not regarded as a Cash ISA but instead a completely different type of ISA.

You can therefore do exactly as you said, use your VM H2B ISA like an easy access account. But you can open a Cash LISA as well (more preferable over S&S if you are looking for a house purchase within the next few years).

You can save into both in the same tax year (200pm into the H2B, and 4000 into the LISA). Definitely do not forget the H2B at that interest rate!! You can then just withdraw the cash from your H2B ISA, penalty free, when you purchase a property, without claiming the bonus (because the bonus will apply to your LISA).

Hope that helps. Let me know if you need anything clarifying.

Oh wow that's great news! Would much rather the Cash LISA rather than a S&S ISA too. Thanks!

Using my Help to Buy Isa (3.5% Rate) as an easy access savings account?

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