Halifax slashes Help to Buy ISA rate to 2%

In May, the bank cut its rate from a market leading 4% to just 2.5% and has today cut this further to 2%.

The provider offering the highest interest rate is now Virgin Money at 2.5%.

Lloyds has also reduced its Help to Buy Isa rate from 2% to 1.5%.

The government's Help to Buy ISA scheme allows savers to deposit up to £1,200 within the first calendar month of funding the account, and then up to £200 monthly thereafter. Once the account has a balance of £1,600 it qualifies for a government bonus of 25% up to £3,000 per person.

However there has been widespread criticism of the Help to Buy ISA since the government clarified last week that the 25% bonus will not be paid until a sale is completed and contracts are exchanged, meaning that the money cannot be put towards a deposit.