Who will offer a Help to Buy: Isa?

Treasury names first six banks and building societies that will offer the Help to Buy: Isa.

Six banks and building societies who will offer the Help to Buy: Isa when it launches at the end of the year have been named by the Treasury.

The Help to Buy: Isa, which was announced in the Summer Budget, is designed to help give savers a boost when building their first deposit.

The banks and building societies that will be participating in the scheme from 1st December are:

• Barclays
• Lloyds Banking Group
• Nationwide Building Society
• NatWest
• Santander
• Virgin Money

Chancellor of the Exchequer George Osborne said that the scheme would "reward thousands of people who are working hard to save for their first home by giving them a 25% boost to their deposit savings”.

The Treasury has confirmed that this is not an exhaustive list and that there is still time for other providers to be welcomed into the scheme.

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How the Help to Buy: Isa works

Each month, a maximum of £200 can be paid into the account. The Government will then top up that deposit with a 25% bonus – so if you pay in £200 a month, a further £50 will be added.

Initially, savers can deposit a lump sum of up to £1,000, which is also eligible for the bonus, and deposit the regular £200 monthly maximum at the same time. This means that a deposit of £1,200 can be made when an account is opened, to which the Government will add £300 to make up a total of £1,500.

The maximum bonus paid out on an account will be £3,000. You would need to pay in £12,000 to receive this. Given the monthly deposit limit, someone who paid the initial £1,000 lump sum and continued to pay in £200 per month would have to wait 55 months – over four and a half years – to earn the maximum £3,000 bonus on one of these accounts.

There is no limit to how long these accounts can stay open, so those not able to pay in £200 per month can still earn the total £3,000 bonus at their own pace.

Isas are, by their nature, individual accounts. So a couple saving together could hold one Help to Buy: Isa each and benefit from a potential £6,000 when saving towards a deposit for their first home.

Treasury guidance says that each provider of the Help to Buy: Isa will offer its own interest rate for each account, and be able to apply normal Isa withdrawal rules too.

Interest rates have not yet been disclosed; Nationwide Building Society, for instance, was able to tell us that it would be paying interest on its account, but that it was too early to give an exact rate.

Make more of your money now: compare savings accounts and Isas