The Help To Buy ISA (Hisa) has finally arrived, and first time buyers will be pleasantly surprised by the rates available, as the first wave products announced include a market-beating 4% interest rate from the Halifax (ISA Advice Bristol).
Someone saving the maximum amount under the Help to Buy ISA scheme with Halifax would earn £1,525 in interest over five years, according to its calculations. Giles Martin, head of savings at Halifax, said: “Many see the new Help to Buy ISA as a genuine solution to get on the property ladder, with half of the prospective first-time buyers intending to open an account”.
“For those looking for an incentive to save regularly, opening this account, with a 4% interest rate from Halifax and 25% government bonus, will make what they do save, work much harder for them.”
Bank of Scotland, Lloyds and Nationwide also unveiled accounts paying 2% interest today, joining NatWest, which confirmed it will pay 2% interest to Help to Buy ISA customers.
In the run-up to launch, expert commentators had voiced concerns that Help to Buy ISA products would pay low rates of interest, as cash ISAs typically earn less interest than taxable savings.
So far these fears appear unfounded, but Santander, HSBC and Virgin Money are yet to show their hands. Newcastle Building Society is also yet to announce its rates, but it has confirmed arrangements that let customers hold a Help to Buy ISA alongside another cash ISA account.
Ben Smith, product development manager at Newcastle Building Society said “We have an innovative facility called Custom ISA that allows savers to take out more than one ISA product in a year providing you stay within your overall ISA allowance, helping savers make maximum use of their full ISA allowance.”
NS&I said it has no plans to launch Hisa products at first, but will continue to monitor the situation.
(Money Wise, January 2016, Tom Wilson)
ISA Advice Bristol
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