You are here: Home - Saving & Banking - News -

NS&I relaunches guaranteed growth and income bonds

0
Written by: Paloma Kubiak
04/12/2017
The government’s saving arm, NS&I, has relaunched its one and three year guaranteed growth and income bonds. How do they stack up?

These products are back on general sale for the first time since 2009 but you can only open them online:

  • The 1-year Guaranteed Growth Bond will pay an interest rate of 1.50% gross/AER, while the 3-year Bond will pay 2.20% gross/AER.
  • The 1-year Guaranteed Income Bond will pay an interest rate of 1.45% gross/1.46% AER, and the 3-year Bond will pay 2.15% gross/2.17% AER.

They can be opened by anyone over the age of 16 and the minimum investment is £500 while the maximum is £1m per person per issue.

Savers also benefit from NS&I’s 100% HM Treasury guarantee on the full amount of up to £1m.

While the bonds are designed to be held for the whole term, they can be cashed in early with a penalty equivalent to 90 days’ interest on the amount cashed in. You must keep a balance of at least £500 to keep the bonds open.

How do they stack up?

These bonds aren’t quite as generous as previous NS&I offerings, but they are competitive, according to Sarah Coles, personal finance analyst at Hargreaves Lansdown.

“The 3-year Guaranteed Growth Bond looks particularly strong, offering the second highest interest rate for a minimum investment of £500 over this term – and matching its current three-year offering, which is on sale until April 2018. The 1-year Guaranteed Growth Bond is also among the top five most generous rates (for £500) over this period, in the current market.”

Coles added that with the maximum £1m saving allowance, all guaranteed by the government, this offer will be particularly attractive to investors with significant savings.

“Their savings would otherwise need to sit in numerous accounts – with gradually less rewarding interest rates – in order to be protected under the £85,000 limit of the Financial Services Compensation Scheme,” she said.

However, data from Moneyfacts reveals the current top rate for a one year bond is an expected 2% profit rate from BLME, though the minimum investment is £25,000.

Otherwise, Atom Bank’s one-year bond offers 1.95% with an investment of just £50. For a three-year term, Atom Bank pays 2.25%. While the competitors offer more attractive rates, non of them offer NS&I’s 100% capital security.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

  • Are you married or in a relationship and still living at home with your parents? According to latest research as ma… https://t.co/SpiNzsKIi6
  • RT @TSB_News: Today we’ve launched market leading rates on the high street with our two-year fixed bond and two-year fixed rate cash ISA. R…
  • RT @TSB_News: Today we’ve launched market leading rates on the high street with our two-year fixed bond and two-year fixed rate cash ISA. R…

Read previous post:
Car insurance renewal cost highest in December

Motorists who renew their car insurance in December are paying almost £100 more than those who insure in February, according...

Close