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NS&I to release new issues of Guaranteed Growth Bonds and Guaranteed Income Bonds from 1 May 2019 with revised terms and conditions

Investment news for Financial Advisers & Paraplanners

29 Mar 2019

NS&I to release new issues of Guaranteed Growth Bonds and Guaranteed Income Bonds from 1 May 2019 with revised terms and conditions

From 1 May 2019, new issues of 1 year and 3 year Guaranteed Growth Bonds and Guaranteed Income Bonds will be on sale with a revised customer agreement (terms and conditions).

The current interest rates, and the holding limit of £10,000 for both Guaranteed Growth Bonds and Guaranteed Income Bonds, will be unchanged.

1-year Guaranteed Growth Bond will continue to pay an interest rate of 1.50% gross/AER, while the 3-year Bond will continue to pay 1.95% gross/AER.

The 1-year Guaranteed Income Bond will continue to pay an interest rate of 1.45% gross/1.46% AER, and the 3-year Bond will pay 1.90% gross/1.92% AER.

Changes to terms and conditions

Currently, once an investment has been made, if customers withdraw their funds early, NS&I will deduct a penalty equal to 90 days’ interest on the amount cashed in.

From 1 May 2019, customers who invest in new Issues of Guaranteed Growth Bonds and Guaranteed Income Bonds will have a 30-day cooling off period at the start of the investment should they change their mind but will no longer have the option to withdraw their funds early.

The current approach of allowing early access is not usual for fixed term products in the savings market and from 1 May 2019, NS&I is making this change to align with most similar products.

Existing holdings will be unchanged until they mature and customers do not need to take action now. NS&I will write to all holders of Guaranteed Growth Bonds and Guaranteed Income Bonds at least 30 days before their Bonds reach the end of their term.

Both 1 and 3-year terms of Guaranteed Growth Bonds and Guaranteed Income Bonds are available to purchase online only through nsandi.com. The Bonds can then be managed online, by phone and by post and are open to people aged 16 and over, held solely or jointly.

Ian Ackerley, NS&I’s Chief Executive, said:

“NS&I is making this change to follow industry standards, however we recognise that committing to a fixed term of investment is an important decision, which is why we have introduced a 30-day cooling off period for customers investing in a fixed term.

“If customers think they may need access to their money, NS&I offers a range of easy-access products which are designed to offer this flexibility.”

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