In this brief guide, we are going to be discussing the Newcastle building society ISA.

In this post, we are going to introduce you to the world of the Newcastle building society ISAs, their best use case and all you need to know about the specific ISAs.e.g which one can help you get on the property ladder or help you save for retirement.

What is the Newcastle building society ISA?

The  Newcastle building society ISA(Individual savings account) is a tax-effective way to save. ISAs allow you to pay no tax or the minimum tax on the interest you make on your savings.

To be eligible for an ISA you will usually have to be:

  • You must be at least 16 years old
  • You must be a UK resident
  • And you must have not subscribed to another UK ISA in the same category in the same tax year

So, you are probably wondering what does “subscribing to an ISA” mean. Subscribing to an ISA means paying into and opening an ISA. You are allowed to subscribe to one of each type of ISA every tax year and you must not exceed your ISA allowance each tax year.

How Many ISAs Can I have?💶🙌🏻

The current tax rules allow you to have or open one of each type of ISA every year but you can only put the maximum tax year ISA allowance in all of these ISAs. This means your combined savings in all your ISA accounts must not exceed your current tax year ISA allowance for the current year. The tax year ISA allowance is currently £20,000.

Can I open a cash ISA AND A LISA in the same year?

Yes, you can open a cash ISA and a LISA in the same year. You can also contribute to a cash ISA and LISA in the same year as long as you don’t go over your personal ISA allowance. You can out whatever you have left in other ISA accounts in the same tax year.

How many Newcastle building society ISAs can you open in one year?🔔❄

You can have multiple Newcastle building society ISAs but not more than one of the same( e.g you can’t have two Newcastle building society cash ISAs)   and your total Tax year ISA allowance must not be exceeded in your combined ISA contributions. This means ISAs you hold with Newcastle building society and ISAs you hold with other providers. Each ISA may also have its maximum contribution limit as well. So check the terms.

What to do if you open more than one type of Newcastle building society ISA?😮ℹ

Although it is very unlikely, if you mistakenly open more than one lifetime or stocks & shares ISA in a single tax year, you should notify your Newcastle building society ISA manager at the earliest opportunity. In some cases, the ISA may be allowed to remain open, once you have consulted with HM Revenue and Customs.

The rules for stocks and shares ISAs are the same as with cash ISAs. You can only pay into one each tax year but can open a new ISA with a different platform each year if you wish to. This means you may be able to further diversify by having one type of Newcastle building society ISA and opening the same type of ISA with a different provider in the next tax year. Contribution rules will still apply.

If you have multiple stocks and shares Isas open, you are only allowed to pay into one of them in each tax year. So, if you only wanted to invest a portion of your Isa allowance via the second Isa provider, this could be difficult as it will mean you are not able to add any new money to the original Isa in the same tax year.

The only other option to consider is transferring your existing portfolio to the other provider, although this might incur some costs.

How do ISA transfers work?🌟✈

ISAs are tax-free saving wrappers and moving them to get a better deal is common. If you move your ISA in the wrong way you could just end up losing your tax-free status and costing you interest made from your ISA. If you want to move your ISA to a Newcastle building society ISA you should contact the Newcastle building society ISA manager.

Why should you transfer your ISA?🌈ℹ

You could transfer your ISA for a variety of reasons such as getting a better rate or because of reasons such as the cost of your current ISA manager or their performance.

You might also be transferring all your ISAs to a new manager to have all your savings in one place or rather move all your savings to different places in a scenario where your combined savings are over the financial services compensation scheme limit of £85,000 per account.

There are a variety of ISA providers out there and you can view their various offerings, including the way they invest, their past returns etc all online so you have an idea of which provider you want to move your money to.

To transfer an ISA you simply open a new ISA account(in this case a Newcastle building society ISA ) then fill an ISA transfer form and send to your old ISA manager. It’s that simple. Once the transfer is done you will get a closure statement showing exactly how much you have transferred.

Be sure to be on the lookout for any charges or transfer out fees imposed by your current ISA manager.

How long does your ISA transfer take?👀

This depends on what ISAs you are transferring. If you are transferring a cash ISA then this should take 15 days. If you are transferring a stock and shares ISA then this will usually take 30 days.

If your ISA transfer takes too long you can report it to the Financial ombudsman.

Which ISAs can you transfer?❄⌛

You can transfer any ISA although there might be some penalty for ISAs which are fixed-term or notice ISAs. Some ISA providers do not accept ISA transfers.

If you have a notice ISA, it is probably best to give notice to your current ISA provider to avoid any charges.

If you choose to proceed without giving notice then you should compare how much interest the new ISA will earn you and the cost of the penalty. If you still make more money by transferring your ISA then, by all means, transfer your ISA if you wish.

The Newcastle building society ISA is covered by the financial services compensation scheme. This means you are covered by up to £85,000 per account in case anything goes wrong with your Newcastle building society ISA.

Types of Newcastle building society ISA

The Newcastle building society offers a host of different ISAs, they include:

Newcastle Cash Lifetime ISA- Up to 1.10%GROSS/AER*

Newcastle One Year Fixed Rate ISA (Issue 25)- Up to1.50%GROSS/AER

Newcastle Two Year Fixed Rate ISA (Issue 41)- Up to 1.65%GROSS/AER

Newcastle Help to Buy: ISA- Up to 2.56%GROSS/AER 

Newcastle First Home ISA- INCLUDING BONUS-1.25%GROSS/AER. EXCLUDING BONUS-0.60%GROSS/AER.

Newcastle Building Society Community Saver ISA (Issue 9)- Up to- 1.16%GROSS/AER

We will talk about all these ISAs in detail below.

You can apply for any of the Newcastle building society ISAs online or if you want you can make an appointment to go into a local branch to discuss the ISA further.

Newcastle Cash Lifetime ISA

The Newcastle cash Lifetime ISA is a type of Newcastle building society ISA and is for first-time buyers looking to get on the property ladder or those looking to save for retirement. If you withdraw any money from your Newcastle lifetime ISA for any other purpose other than this you will be charged a 25% penalty.

The interest rate on this account is 1.10 %Gross*/ 1.10% AER** (Variable). This interest rate is calculated daily and paid annually on the account opening anniversary.

As the interest rate on this Newcastle cash Lifetime ISA is variable , this means that the Newcastle building society can change the rate of interest on this ISA account at any time.

You can open this account online or in branch and give any instructions for the account online, by phone or by post.

To open this account you will need a minimum balance of £1 which is also the minimum balance needed for you to be eligible for the government bonus.

You will also need to be between 18 and 40 years old, reside in the uk 

Be a Crown Servant (for example a diplomat or civil servant) 

Or the spouse or civil partner of a Crown Servant

The lifetime ISA scheme is a government scheme which helps first-time buyers get on the property ladder or people save for retirement.

Who qualifies as a first time buyer?

A first time buyer is someone who does not own any property in the World. This includes property in a will, trust or as a result of a divorce.The maximum house price you can purchase utilizing the Newcastle cash Lifetime ISA is £450,000. You can purchase a property with someone else on a Lifetime ISA but the maximum property price does not double.You can also use the Lifetime ISA with other First time buyer schemes such as the Help to buy equity loan scheme.

Can I open my Newcastle cash Lifetime ISA with other ISAs?

Yes you can as long as you don’t exceed your current ISA allowance for the tax year which currently stands at £20,000. You can however not use the bonus for both when purchasing a home. You will have to pick which one you use to buy a new home and any funds withdrawn from the other ISA product will incur a withdrawal penalty.

When can I withdraw money from my Newcastle cash Lifetime ISA?

You can withdraw your money before the age of 60 as usual although you will face a Government withdrawal penalty of 25% or you can withdraw it when buying a first home under £450,000 without any penalty. The property must be a mortgaged property and you can only utilize the Lifetime ISA 12 months after opening it with your solicitor acting on your behalf to ensure your Lifetime ISA bonus is activated and Lifetime ISA account is closed without any penalty. If your property purchase is taking more than 90 days you can contact HMRC for an extension.

If you fail to buy a property you can return all the funds and the interest missed will be paid and it will not be classed as a withdrawal.

You can of course always withdraw your money after age 60 and above with no penalty whatsoever.

A withdrawal charge won’t apply if you’re:

  • using it towards a first home
  • aged 60
  • terminally ill with less than 12 months to live
  • transferring to another Lifetime ISA with a different provider
  • If you die, your Lifetime ISA will end on the date of your death and there won’t be a withdrawal charge for withdrawing funds or assets from your account.

How is the Government bonus paid on my Newcastle cash Lifetime ISA?

The Government bonus will be paid monthly and this will allow you to earn more interest on the cumulative deposits.

You cannot contribute to your Newcastle cash lifetime ISA one you turn 50.

You can open the Newcastle cash lifetime ISA here

Newcastle One Year Fixed Rate ISA (Issue 25)

The Newcastle one year fixed rate ISA (issue 25) is a type ofNewcastle building society ISA. It is a cash ISA which allows you to save up to £20,000 in it per tax year. You can transfer an ISA account from another ISA into this account.

The interest rates on the Newcastle one year fixed rate ISA (issue 25) are as follows:

Annual Gross*/AER** – 1.50%/1.50% (Fixed until 20th October 2020). Interest is paid on: 20th October 2019, 20th October 2020.

Monthly Gross*/AER** – 1.49%/1.50% (Fixed until 20th October 2020). Interest is paid on: Last business day of the month.

As the interest rate on the Newcastle one year fixed rate ISA (issue 25) are fixed the rates on this account will not change until the ISA matures on October 20th 2020.

You can open this account online or in branch and give any instructions for the account online, by phone or by post.

To open this account you will need a minimum balance of £500. There is no maximum balance on this account.

You can make withdrawals on the account as long as you are happy with a 90 days loss of interest. 

Upon maturity (20th October 2020) of the account your funds will roll into a default savings account which has easy access.

You can open a Newcastle one year fixed rate ISA (issue 25) account here.

Newcastle Two Year Fixed Rate ISA (Issue 41)

The Newcastle Two Year Fixed Rate ISA (Issue 41) is a type of Newcastle building society ISA. It is a  cash ISA which allows you to save up to £20,000 in it per tax year. You can transfer an ISA account from another ISA into this account.

The interest rates on the Newcastle Two Year Fixed Rate ISA (Issue 41) are as follows:

Annual Gross*/AER** – 1.65%/1.65% (Fixed until 20th October 2021). Interest is paid on: 20th October 2019, 20th October 2020 and 20th October 2021.

Monthly Gross*/AER** – 1.64%/1.65% (Fixed until 20th October 2021). Interest is paid on: Last business day of month.

As the interest rate on the Newcastle Two Year Fixed Rate ISA (Issue 41) are fixed the rates on this account will not change until the ISA matures on October 20th 2020.

You can open this account online or in branch and give any instructions for the account online, by phone or by post.

To open this account you will need a minimum balance of £500. There is no maximum balance on this account.

You can make withdrawals on the account as long as you are happy with a 120 days loss of interest. 

Upon maturity (20th October 2021) of the account your funds will roll into a default savings account which has easy access.

You can open a Newcastle Two Year Fixed Rate ISA (Issue 41) account here. 

Newcastle Help to Buy: ISA

The Newcastle Help to buy ISA is a type of Newcastle building society ISA and it is only available in the following postcodes – NE, SR, DH, TD10 – 15, DL, TS, CA1 – 17.

The interest rate on the Newcastle help to buy ISA is -Monthly 2.53 %Gross*/ 2.56% AER** (Variable).

The interest on the Newcastle help to buy ISA is calculated daily and paid into the account on the 1st day of each month.

You can open this account online or in branch and give any instructions for the account online, by phone or by post.

What is the Newcastle Help to Buy ISA?

The Newcastle help to buy ISA is a tax free wrapper where you can save up to £200 a month(max) and an additional maximum of £1200 a month in your first month.The Help to Buy ISA comes with a maximum £3000 tax free Government bonus. If you use the money in your ISA to buy a home the government adds 25% of whatever is in your ISA to your mortgage deposit as a bonus with two exceptions.

  • You need at least £1600 saved to get the bonus
  • The maximum bonus you can get is £3000( so the maximum amount the government will pay you a bonus on is £12,000) although you can save more than this amount on the Newcastle help to buy ISA.

Quick facts about theNewcastle Help to Buy ISA:

  • To qualify for the help to buy ISA you need to be a UK resident and over the age of 16. The deadline for applying for a Help to Buy ISA is December 2019 and you must use it for a mortgage deposit by December 2030 if not you will not be eligible for a bonus.
  • You can only open the Help to Buy ISA per person and not as a couple etc The maximum property price you can purchase with the Help to buy ISA is £450,000 in London and £250,000 anywhere outside London.
  • You can only open one Help to buy ISA although you can transfer it to a different provider at any time.
  • Your maximum personal ISA allowance per year is £20,000
  • Your solicitor applies for you to get the Bonus for your mortgage deposit
  • You can withdraw your money at any time but of course the withdrawn amount will not count towards your bonus.
  • The bonus you are paid is calculated on the closing balance of your account and will be stated on your help to buy closing letter.
  • Any funds which you withdraw cannot be put back into the account. You can only pay your maximum monthly contribution of £200 into the account.
  • If the purchase of your property falls through you should get a failure notice which can be sent back to Newcastle building society so they can repatriate your funds into a new Help to Buy ISA

You can open the Newcastle help to buy ISA here.

Newcastle First Home ISA

The Newcastle first home ISA is a type of Newcastle building society ISA and offers a cash bonus of up to £1,000 if you save in its regular savings account and complete a mortgage with the Newcastle building society.

The more you save in the Newcastle First Home ISA, the more cashback you can earn, up to a maximum of £1,000 if your mortgage with the Society is £200,000 or more, this is illustrated below.

If you save between £5,000 and £9,999 in your Newcastle First Home Saver or ISA savings balance and get a Newcastle building society mortgage of between £75,000 and £149,999 then you will get a cashback of £500.

If you save above £10,000 in your Newcastle First Home Saver or ISA savings balance and get a Newcastle building society mortgage of between £150,000 and £199,999 then you will get a cashback of £750.

If you save above £10,000 in your Newcastle First Home Saver or ISA savings balance and get a Newcastle building society mortgage of above £200,000 then you will get a cashback of £1000.

The interest rate without Bonus on the Newcastle first home ISA or saver is- Monthly 0.60% Gross*/0.60%  AER** (Variable).

The interest rate with Bonus (includes a bonus of 0.65% Gross*/AER**) on the Newcastle first home ISA or saver is- Monthly 1.25% Gross*/ 1.26% AER** (Variable).

The interest rate is variable and this means that the Newcastle building society can change the interest on the account at any time.

The interest and bonus interest are calculated daily and will be paid into your account monthly on the 1st of each month

The conditions to receive the bonus interest are as stated “ You must make at least one Deposit and make no withdrawals in each Calendar Month. The bonus interest on your Account is variable. If you do not make an investment or you make a withdrawal during a Calendar Month, your account will be credited with the non-bonus interest rate, currently 0.60% Gross* / 0.60% AER** (variable), in that calendar month. “

The minimum you can open the Newcastle first home ISA or saver with is £1  and the maximum is £10,000.

Minimum Regular Monthly Deposit for the bonus interest rate is £1 and the maximum Regular Monthly Deposit for the bonus interest rate is £1,000.The maximum Account Balance: £40,000

You can open this account online or in branch and give any instructions for the account online, by phone or by post.

You can make Withdrawals/transfers penalty free without notice. Any withdrawals from the account can only be repaid in accordance with the maximum monthly subscription limits.

You can open the Newcast first home ISA or saver here.

Newcastle Building Society Community Saver ISA (Issue 9)

The Newcastle building society community saver ISA is a type of Newcastle building society ISA and is not within the scope of this guide. You can read more about it here.

The information provided on this page about the Newcastle building society ISA is accurate at the time of writing. You should check with the Newcastle building society ISA website as some of the information on this page may have changed.

If you have any questions or comments please let us know.

John Bate

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.