Lifetime ISA Question

[challengez]

Various comparison sites recommend Moneybox as the top Cash Lifetime ISA, but its headline rate drops by 1% at the end of the first year. My son has had his account for 3 years, so he's been getting the lower interest rate for 2 years, currently 4% but variable.

He has around £15k in the account (including £3k Government bonus).

He is likely to want to buy within the next 1-5 years, so a Stocks & Shares ISA may be risky. Nevertheless, I'm thinking of suggesting he transfers the account to Dodl, which is a S&S ISA with 5.09% interest on funds left in cash. It has an annual 0.15% fee. So would I be right in thinking he would get an equivalent interest rate of 5.09 - 0.15 = 4.94%?

Or am I missing something?

You pay penalty for withdrawing though - 25% iirc

My son intends to use his LISA for a house deposit within the rules, so doesn't expect to pay a withdrawal penalty.

There's no charge for transferring from Moneybox LISA to another LISA.

My lifetime ISA with Moneybox is at 4% and I've had it years, I save into their instant access account which has a higher interest rate and then transfer it at the end of the financial year to get the Govt bonus.

Ah it wasn’t clear the new scheme was another LISA in your post as you said it was a S&S ISA

Sorry, my error - it's a LISA.