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  • FIRST POST
    • funky18
    • By funky18 14th Mar 18, 12:32 AM
    • 2Posts
    • 1Thanks
    funky18
    HTB ISA and Cash ISA dilemma
    • #1
    • 14th Mar 18, 12:32 AM
    HTB ISA and Cash ISA dilemma 14th Mar 18 at 12:32 AM
    Hi all,

    Over the years I have managed to save about 30k which I have earned virtually no interest on in my HSBC Flexi Saver. I'm am not financially savvy at all. I decided to chnge this today and I opened a loyalty cash ISA from HSBC today with an interest rate of 0.65% and transferred in the 20k max before the end of the tax year.

    I am hoping to keep saving to one day buy property. Should I have opened a HTB ISA instead?
    If I don't pay into my cash ISA next year, can I still open up a HTB ISA? And in that case what can I do with my remaining 10k? I have just learnt that nationwide offer split ISAs so I can pay into a normal cash ISA (earning 1.4%) and a HTB (2% interest). Would I be able to transfer my new cash ISA from HSBC to Nationwide or have I messed up my new financial savvy plan already? Help!
Page 1
    • Riff Raff
    • By Riff Raff 14th Mar 18, 11:07 AM
    • 18 Posts
    • 12 Thanks
    Riff Raff
    • #2
    • 14th Mar 18, 11:07 AM
    • #2
    • 14th Mar 18, 11:07 AM
    Have you read up (on this website) about Lifetime ISAs, and how non-ISA savings and current accounts offer better interest rates than regular cash ISAs?

    https://www.moneysavingexpert.com/savings/lifetime-ISAs
    https://www.moneysavingexpert.com/savings/savings-accounts-best-interest
    • funky18
    • By funky18 14th Mar 18, 1:22 PM
    • 2 Posts
    • 1 Thanks
    funky18
    • #3
    • 14th Mar 18, 1:22 PM
    • #3
    • 14th Mar 18, 1:22 PM
    I briefly considered the LISA. But buying a home may be a pipe dream even with my current savings. London is a joke. So I want the flexibility to use my money for something other than a house without incurring a 25% penalty.
    • Alexland
    • By Alexland 14th Mar 18, 9:47 PM
    • 2,555 Posts
    • 1,936 Thanks
    Alexland
    • #4
    • 14th Mar 18, 9:47 PM
    • #4
    • 14th Mar 18, 9:47 PM
    HTB ISAs are a type of Cash ISA and you are only allowed to contribute to one per tax year. The only exception is if the provider offers a Split Cash ISA in which one part is HTB and the other part is a Cash ISA.

    Given you have used all your £20k in a Cash ISA this tax year you can next contribute to a HTB ISA in the new tax year (from the 6th April 2018). If you choose a HTB ISA provider that offers Split Cash ISAs then you can open a Cash ISA with the same provider and make contributions next tax year. However there's not much point as Cash ISAs have such a poor rate of interest you could consider a normal savings account and using your Personal Savings Allowance to avoid tax.

    https://www.gov.uk/apply-tax-free-interest-on-savings

    Alex.
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