Help to Buy ISA guide

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Comments

  • geiger
    geiger Posts: 3 Newbie
    edited 15 April 2018 at 12:53AM
    Hi,

    My partner made a mistake and set up a Help to buy isa last year and paid £1000 deposit by online bank transfer to open the isa then made regular payments also via bank transfer from her RBS account and not by standing order.

    All the payments were accepted and show up in her account but she is worried that when it comes to closing the account she will not get any of the bonus, is this right?

    Thanks
  • dekkard
    dekkard Posts: 229 Forumite
    Name Dropper First Post First Anniversary
    geiger wrote: »
    Hi,

    My partner made a mistake and set up a Help to buy isa last year and paid £1000 deposit by online bank transfer to open the isa then made regular payments also via bank transfer and not standing order.

    All the payments were accepted and show up in her account but she is worried that when it comes to closing the account she will not get any of the bonus, is this right?

    Thanks

    Why do you think bank transfers are the wrong way to pay into the ISA? Does the bank say so?

    Either way, the bank would probably have told you if there was an issue. Mine was very quick to send a letter when I overpaid by £1 on one occasion!
  • eskbanker
    eskbanker Posts: 30,913 Forumite
    First Anniversary Name Dropper Photogenic First Post
    geiger wrote: »
    My partner made a mistake and set up a Help to buy isa last year and paid £1000 deposit by online bank transfer to open the isa then made regular payments also via bank transfer from her RBS account and not by standing order.

    All the payments were accepted and show up in her account but she is worried that when it comes to closing the account she will not get any of the bonus, is this right?
    If the payments were accepted then she has nothing to worry about.

    There is nothing in the HTB scheme rules about exactly how they're funded (i.e. bank transfer v standing order) but some products have their own individual Ts & Cs about this sort of thing, but even if a saver breaches those it wouldn't affect claiming the bonus from the government.

    If the product Ts & Cs insist on actual standing orders then it would obviously be best to pay in that way now she's aware of this....
  • geiger
    geiger Posts: 3 Newbie
    dekkard wrote: »
    Why do you think bank transfers are the wrong way to pay into the ISA? Does the bank say so?

    Either way, the bank would probably have told you if there was an issue. Mine was very quick to send a letter when I overpaid by £1 on one occasion!

    Yes, it states in Halifax t&c that all monthly payments are to be paid via standing order only
  • dekkard
    dekkard Posts: 229 Forumite
    Name Dropper First Post First Anniversary
    geiger wrote: »
    Yes, it states in Halifax t&c that all monthly payments are to be paid via standing order only

    Sounds like eskbanker has answered your query.

    Why not move the isa to Barclays and get the top rate? ;)
  • geiger
    geiger Posts: 3 Newbie
    dekkard wrote: »
    Sounds like eskbanker has answered your query.

    Why not move the isa to Barclays and get the top rate? ;)

    we will buying a house in the next month or two, it doesn't seem worth it to move now, thanks for the tip though:beer:
  • RainTown
    RainTown Posts: 3 Newbie
    I am confused for rules with HTB and other ISA per tax year.

    I have some funds in HTB and Cash ISAs @ Nationwide. I have, for a couple of years, added 200 per month to the HTB ISA, and to the cash ISA "when I can". I have approx 10x the funds in Cash ISA as in the HTB ISA

    In 2018/2019 I have not added to either yet.

    The nationwide cash ISA interest rate is now not competitive, so I want to move elsewhere. Lets say I move to Virgin.

    Can I do this and continue to pay 200 per month to Natonwide HTB ISA?

    If that is not allowed, can I just "freeze" my HTB ISA @ Nationwide, not deposit anything further in 2018/2019, and move Cash ISA funds to Virgin?

    I want to keep my HTB ISA, though house purchase is not imminent.

    But I also want to use the full 20k ISA allowance in 2018/9 if I can and at a competitive interest rate.

    Thanks for any advice!!
  • Alexland
    Alexland Posts: 9,653 Forumite
    First Anniversary Photogenic Name Dropper First Post
    edited 15 April 2018 at 11:34AM
    Sure you can move your Cash ISA contributions from previous tax year(s) to a new provider however if you intend to continue contributing to the HTB ISA this tax year your Cash ISA part (for at least this tax year) must be with the HTB provider.
  • RainTown
    RainTown Posts: 3 Newbie
    But can I open a second HTB ISA with second provider (one who would also offer a Cash ISA)?

    I presume not, so I am stuck between sticking with Nationwide to be able to continue to top up the HTB ISA, and accepting the poor interest rate on their cash ISA, or opening and transferring to new cash ISA while freezing HTB ISA at Nationwide?

    RT
  • eskbanker
    eskbanker Posts: 30,913 Forumite
    First Anniversary Name Dropper Photogenic First Post
    RainTown wrote: »
    But can I open a second HTB ISA with second provider (one who would also offer a Cash ISA)?
    No, you can only have one HTB ISA, as per https://www.helptobuy.gov.uk/help-to-buy-isa/faq/#bb8e24ea-e1f7-648f-8ce9-ff0000ad17aa:
    How many Help to Buy: ISAs can I have?

    You can only have one Help to Buy: ISA at any one time. Unlike a cash ISA, you can’t open a new one every year. But you can transfer your Help to Buy: ISA from one bank, building society or credit union to another.
    RainTown wrote: »
    I presume not, so I am stuck between sticking with Nationwide to be able to continue to top up the HTB ISA, and accepting the poor interest rate on their cash ISA, or opening and transferring to new cash ISA while freezing HTB ISA at Nationwide?
    If you want to pay into both a HTB ISA and a non-HTB cash ISA this tax year then they both need to be with one of the providers who offer split ISAs, others being listed at https://www.moneysavingexpert.com/savings/best-cash-isa under "Can I split between a fixed and easy-access ISA (or regular saver ISA)?".

    If you only want to pay into an HTB (and not another cash ISA) you can either keep it with Nationwide or transfer it to any other HTB ISA provider and keep paying no more than £200/month. You can pay the rest of your allowance into other ISA types, such as Lifetime ISA or even S&S ISA (to minimise investment risk you could for example put £17,600 into a S&S ISA late in the tax year, keep it uninvested and transfer it to a cash ISA in early 2019/20).

    Or if you're happy not to pay into your HTB any more, you can open and fund a cash ISA with any other provider.

    Always best to consider total return and your end game though - cash ISA rates are generally poor just now (for a number of years) and chances are your money will work harder for you if you fund a Lifetime ISA (or a HTB) and put your other money elsewhere in accounts paying better than cash ISAs, such as regular savers and/or interest-paying current accounts.
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