Help to Buy Isas: which account should I get?

Help to Buy Isas offer a boost to first time buyers struggling to save for a deposit.

The main attraction of a Help to Buy Isa is that the Treasury will give you a bonus of up to £3,000 when you buy your first home. Finding an account paying a decent interest rate will also help you build your deposit faster.

Thankfully, the rates on Help to Buy Isas compare very favourably with normal Cash Isas. You'll struggle to 1.5% on an instant access Isa, but plenty of these accounts pay 2% or more. 

It’s arguably fairer to compare them with regular savings accounts, as you’ll be growing your deposit over time. Even on this basis, Help to Buy Isa rates are far better. And that's before you've considered the government bonus. 

But there’s huge variation between the rates on offer, so shopping around for the best rate is even more important than normal. If you save £12,000 you will earn the maximum £3,000 bonus. You can save up to £200 each month, plus an additional £1,000 when you first open a Help to Buy Isa.

They’ll all let you transfer in, so if you’ve started a Cash Isa this year you can switch the balance over to any account listed here.

If you’ve saved more than the limit this year, consider an account that lets you hold a second Cash Isa like Nationwide. Or alternatively, you could close the first account and reopen another. If you do that, anything you’ve already put into an Isa will come out of your allowance for the year.

Where can you get the best deal?

Barclays 2.27% AER
The best deal available across the UK. It allows monthly interest payments, which can be useful if you want to switch of close the account early. Can be opened in branch and over the phone.

Buckinghamshire Building Society 2.25% AER
This building society account is open to everyone and can be opened by post and in branch. It pays interest monthly.

Nationwide 2% AER
If you can save more than £200 a month this is worth considering. It’s one of a few providers that lets you keep the rest of your yearly allowance inside a separate Cash Isa - this is sometimes known as a split Isa. It can be opened online and in branch.

Other providers offering Help to Buy Isas at 2% include Halifax, HSBC, NatWest, Virgin Money and Yorkshire Building Society but these don't allow split Isas. The Progressive Building Society also offers a 2% rate, but only to people in Northern Ireland.

Local Help to Buy Isa deals

Penrith Building Society 3% AER
This is the best rate on the market, but you have to live in Cumbria to open this account.

Cumberland Building Society 2.75% AER
Account must be opened in branch. These are only located are in Cumbria, Lancashire and southern Scotland.

Tipton and Coseley Building Society 2.75% AER
Only available to residents of the West Midlands who live in the B, DY, WS or WV postcode areas.

Darlington Building Society 2.55% AER
This account is also restricted. You must live in a DL, DH, SR, TS, YO or HG postcode area to apply.

To see all the savings accounts on the market today visit the Moneywise savings and Isa comparison tool.

Published: 01 December 2015
Last updated: 12 June 2017