National Savings and Investments (NS&I) Questions and Answers.

What is the purpose of National Savings and Investments.

National Savings and Investments is part of the UK's government debt management programme. Their job is to raise money for the UK government that are cost effective in relation to what the government could borrow at in the wholesale market. What this basically means is that money invested with National Savings and Investments is used to help finance the UK government debt. The UK government raises money in two main ways through the sales of gilts and treasury bonds and through NS&I.

Latest News 12/05/2011 - NS&I today introduced for general sale new Issues of its Savings Certificates, including Index-linked Savings Certificates (also known as Inflation-Beating Savings) and Fixed Interest Savings Certificates. The new Issues are available to savers in a 5-year term only and are tax-free. Index-linked Savings Certificates will pay index-linking, measured by the Retail Prices Index, plus a fixed rate of interest of 0.50% AER. Fixed Interest Savings Certificates will pay 2.25% AER 24/03/2010 - Gross inflows (unaudited) for the quarter were £7.7 billion, bringing the year-to-date total to £14.3 billion. Net Financing for the quarter was £3.2 billion, bringing the year-to-date total to £1.2 billion.  22/07/2009 - In the first quarter of 2009 NS&I received 3.2 billion of new money from savers and had 4.5 billion of withdrawals from savers. 04/03/2009 - As of the end of November 2008 National Savings and Investments total funds represented 8.11% of the savings market and 12.7% of the national debt. Gross inflow in the 3rd Quarter of 2008 was £9.55 billion.

What are National Savings and Investments (NS&I)

National Savings and Investments (NS&I) are investments that are backed 100% by the UK government so the £50,000 Financial Services Compensation Scheme is not applicable (details on the FSCS here). The range of products offered by National Savings and Investments are Tax free investments like Premium Bonds,ISA's and Saving Certificates to Growth Bonds, Monthly Income Bonds and Easy Access Accounts. More on each can be found below.

Which National Savings and Investments are tax free?

Premium Bonds

Premium Bonds are currently (May 2011) paying 1.50% on the prize fund. The odds of winning a prize for each £1 bond each month is currently 24,000 to 1. The minimum investment is £100 and the maximum premium bond holding an individual can have is £30,000. Individuals must be over 16 to buy premium bonds. On the 18/03/2009 National Savings announced that that from April 2009 a new £25 premium bond will be introduced and only one 1 £1,000,000 premium  bond prize will be available.

FIXED INTEREST SAVINGS CERTIFICATES (rates as at 13/05/2011) The five year issue currently pays 2.25% which is equivalent to 3.75% for a higher rate tax payer and 2.81% for a basic rate taxpayer. The minimum investment is £100 and the maximum is £15,000 per issue. INDEX LINKED SAVINGS CERTIFICATES (rates as of 13/05/2011) National Savings and Investments offer a 5 year index linked bond. These certificates are index linked and offer guaranteed extra interest of 0.50% compounded either over 5 years. Minimum investment is £100 and maximum £15,000 per issue.

Non Tax Free National Savings and Investments (NS&I)

Guaranteed Growth Bonds Currently n/a 13/05/2011 Guaranteed Income Bonds (Monthly Income) Currently n/a 13/05/2011 Easy Access Savings Account. This pays between 0.30% and 0.70% depending on the account balance and allows instant access up to £300 per day through Post Offices or an ATM.  Direct ISA - 2.50% National Savings and Investment Rates correct @13/05/2011

For other non government accounts click on one of these links. FIXED RATE BONDS   BEST SAVINGS RATES  ISA's  REGULAR SAVINGS ACCOUNTS  CHILD TRUST FUND  BEST INSTANT ACCESS SAVINGS ACCOUNTS