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UK National Savings and Investments products

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There can't be many British people that haven't heard of National Savings and Investments. In fact they now have over 25 million customers who have entrusted over £100 billion of their money into their various products.

History

National Savings and Investments started back in 1861 as the UK Post Office Savings Bank, providing a straight-forward savings plan for savers to set money aside in case they became ill or fell on hard times. In 1969, its connection with the Post Office was, in the main, severed and it became known as National Savings. In 1996, it came under the wing of the Chancellor of the Exchequer.

Guarantee

A major benefit of investing in National Savings and Investment products is that your funds, no matter how much is invested, are 100% secure, as they are backed by the Treasury.

Products

National Savings and Investments offer a range of products to cater for people of all ages, some of which have been discontinued as they regularly review their product range. Depending on the product that you wish to purchase or administer you can do so either online, by phone, by post or by calling into a Post Office to talk to someone face to face.

Below are some of the products currently available or that have been available together with a little information about each of them:

Premium Bonds – If you are at least 16 years of age you can invest in Premium Bonds. Parents, grandparents and great grandparents can invest for those under 16. The minimum investment is £100 with the maximum being £30,000. Each month your funds are placed in a prize draw in £1 units with the chance to win varying amounts up to £1 million that is paid tax-free. There is no notice period or penalty if you wish to withdraw some or all of your money.

Direct ISA – Available to those at least 16 years of age who are happy operating the account by phone or online. The minimum investment is £1 and the maximum is £5,760 in the tax year 2013/2014. Interest, which is a variable rate, is paid tax-free. No notice period or penalty to withdraw funds.

Direct Saver – Available to those at least 16 years of age who wish to operate the account either online or by phone. You can invest from as little as £1 to as much as £2 million. The interest rate is variable and is paid gross so you may need to pay tax on any interest earned. There is no notice period to withdraw money and no penalty for doing so.

Income Bonds – Available to those at least 16 years of age. You can operate the account either by phone, online or post. The minimum investment is £500 and the maximum is £1 million. Interest is paid monthly on a gross basis so you may need to pay tax on it and the rate is variable. There is no notice period or penalty to withdraw funds.

Investment Account – Available to those at least 16 years of age but can be opened on behalf of a child below 16 years of age by a parent, grandparent, great grandparent or legal guardian. It is a postal account. The minimum amount is £20 and the maximum is £1 million. Gross interest is paid annually and you may need to pay tax on any interest earned. There is no notice period and no penalty to withdraw funds.

Children’s Bonds – Available for children until they are 16 years of age. The minimum investment is £25 and the maximum is £3,000. The interest rate is fixed for a five-year period and is tax-free. There is a penalty of 90 days interest if the bond is cashed in early.

Savings Certificates – When available, you can invest in either index linked or fixed interest savings certificates with the former linked to the Retail Prices index. The returns are tax-free.

Guaranteed Bonds – When available, you can invest for a fixed period of time for either growth or income at a fixed rate of interest.

So, as you can see, there is an extensive product range.

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