Best Help to buy ISA

Help to Buy ISA is a good option if you’re a first-time buyer saving for a mortgage deposit. The government will will boost your savings with 25% bonus on top of what you save. So, for every £200 you save, you receive a government bonus of £50. This could mean you can receive up £3,000 in bonus if you take advantage of this great scheme. The property you buy must be £250,000 or less (or up to £450,000 in London).

The accounts are suitable and available to each first time buyer. This means that if you are planning to buy a house with your partner, for example, you could receive a government bonus of up to £6,000 towards your first home.

If you want one, you need to act really quickly and open an account by 30 November 2019. You can open the account by a depositing only £1.00 so there is no reason to miss out. You can save between £1 and £200 a month. However, there is no obligation to add to your Help to Buy ISA each month. You’ll need to save at least £1,600 in the account to qualify for the 25% Government bonus. Below are the best Help to Buy ISAs available on the market.

1. Barclays Help to Buy ISA

Barclays are offering 2.58% interest. If you’re an existing customers you can open the account online. If you are not an existing customers existing customer you’ll need to head to your nearest branch to apply.

This account can be opened by depositing just £1, but as with all other Help to Buy ISAs, you are able to deposit up to £1,200 in the first month of the account opening. The rate is variable, you will need to keep an eye in case the rate drops too low.

Key features
  • Interest Rate: 2.58% AER variable
  • Interest Paid: Monthly
  • Minimum Deposit: £1
  • Account Management: Online (for Barclays customers only) branch/phone
  • ISA Transfer: Allows previous ISA to be transfers from another provider
  • No Withdrawal Penalty

2. Nationwide Help to Buy ISA

The Nationwide Help to Buy ISA pays 2.5%. Although this less than above, Nationwide offers a Split ISA. This means enables you to pay into a Help to Buy ISA and a Cash ISA in the same tax year. However, both of these accounts must be through National wide.

So if you already hold a cash ISA and you’ve saved some monies since 6 April 2019, you can transfer it to Nationwide and then transfer money each month to your Help to Buy ISA, while keeping your cash ISA open. Alternatively, you can open it with new money and save in the cash ISA and the Help to Buy ISA.

Key features
  • Interest Rate: 2.5% AER variable
  • Interest Paid: Yearly on account anniversary
  • Minimum Deposit: £1
  • Account Management: Online (for Barclays customers only), Branch/Phone
  • ISA Transfer: Allows previous ISA to be transferred from another provider
  • No Withdrawal Penalty

3.Virgin Money Help to Buy ISA

The Virgin Money Help to Buy ISA currently pays a competitive interest rate of 2.5% variable. Although, this pays the same rate as Nationwide, it doesn’t offer a split ISA which means you can’t save into a cash ISA and a Help to Buy ISA.

Existing and new customers can open the account online. The account can only be managed online only. If you already hold a cash ISA and you’ve saved some monies since 6 April 2019, you can transfer it to Virgin Money.

Key features
  • Interest Rate: 2.5% AER variable
  • Interest Paid: Monthly
  • Minimum Deposit: £1
  • Account Management: Online
  • ISA Transfer: Allows previous ISA to be transferred from another provider
  • No Withdrawal Penalty

4. Natwest Help to Buy ISA

Natwest offers similar benefits to the others I’ve mentioned above. The current rate of interest on the account is 2.5%. Existing and new customers can open the account online. If you already hold a cash ISA and you’ve saved some monies since 6 April 2019, you can transfer it to Natwest.

Key features
  • Interest Rate: 2.5% AER variable
  • Interest Paid: Monthly
  • Minimum Deposit: £1
  • Account Management: Online/branch/phone/app
  • ISA Transfer: Allows previous ISA to be transferred from another provider
  • No Withdrawal Penalty

Additional Information

Interest rate definitions explained: AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year. Gross p.a. is the interest rate without tax.

The treatment of your account for tax purposes will depend on your individual circumstances and you may need to pay tax on any interest that exceeds your Personal Savings Allowance. For more information please visit HM Revenue & Customs’ (HMRC) website hmrc.gov.uk (This link will open in a new window). The tax information provided is based on our understanding of current law and HMRC practice, both of which may change.

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