Find out more about NS&I, including what it is, the types of savings bonds, certificates, and Isas it offers, as well as how your money is secured.
What exactly is the National Savings and Investments Association?
NS&I, which stands for National Savings and Investments, is a government department as well as an executive agency under the Chancellor of the Exchequer. This organisation provides numerous possibilities for savings and investments that are supported by the government.
Because the funds are backed by HM Treasury, your money is completely secure, and there is no cap on the amount that can be compensated in the event that NS&I goes bankrupt (as this would mean the UK government would have gone bust).
The organisation was established in 1861 with the goal of providing a safe location for individuals to store their savings and a source from which the general public may borrow money.
Today, it offers a number of different ways to save money and make investments, ranging from its well-known premium bonds to a Junior Isa. This section will describe what these products are and how they function in detail.
Investments
What exactly are NS&I Guaranteed Income bonds and how do they work?
Guaranteed Income bonds from NS&I are very similar to fixed-term bond savings accounts that are provided by a number of different banks.
Because the interest rate will remain the same during the period of the term that you choose to save your money for, you will receive a “guaranteed” return on your savings.
Bond AER Availability
0.06 percent for a term of one year
Exclusively for clients who are purchasing a new bond to replace an existing one
0.11 percent for a duration of two years
Exclusively for clients who are purchasing a new bond to replace an existing one
0.36 percent over a three-year period
Exclusively for clients who are purchasing a new bond to replace an existing one
0.51 percent interest over the course of five years Only available to customers who are refinancing an existing bond
Your interest is computed on a daily basis and paid to you on a monthly basis. Because it is considered part of your personal savings allowance, you may be subject to taxation on it.
There is a minimum initial deposit requirement of £500 for all bonds, and the maximum amount you can save is £10,000.
You are required to submit your application for the bonds via the website, but you can manage them via the website, through the mail, or over the phone.
You have the ability to take money out of the bond before the end of the term; however, you will be subject to a penalty equal to ninety days’ worth of interest on the amount that you cash in, and you will be required to maintain a savings balance of at least five hundred pounds for the bond to remain active.
When the bond you own matures, also known as when the fixed period comes to an end, you will be able to access your money free of charge.
You also have the option of investing it in a different bond; NS&I will get in touch with you one month in advance to inform you of the various alternative choices you have, and clients who are renewing maturing bonds occasionally have access to products that are only available to those customers.
What exactly are Nova Scotia and Island Guaranteed Growth bonds?
Also functioning similarly to a fixed-rate savings account, and with few variations to the Guaranteed Income bonds, the distinction here is that interest is paid annually on the anniversary of taking out the bond. This occurs one year after the bond was purchased.
When you purchase bonds, the interest rate you receive is locked in for the duration of the bond’s tenure.
The following is how the rates stand at the moment:
Bond AER Availability
0.1% annualized for the short term
Only accessible to customers who are refinancing an existing maturing bond.
Term of two years, 0.15 percent interest rate
Only accessible to customers who are refinancing an existing maturing bond.
0.4% over a period of three years
Only accessible to customers who are refinancing an existing maturing bond.
0.55 percent throughout the course of five years
Only accessible to customers who are refinancing an existing maturing bond.
It is required that you make an initial deposit of at least £500, and the maximum amount you can invest is £10,000.
If you withdraw money before the end of the term, you will forfeit ninety days’ worth of interest on the total amount of money that you withdraw.
The amount of interest you earn is subject to taxation and counts toward your personal savings allowance.
What exactly are these NS&I Income Bonds?
Because they deposit interest into your bank account on a monthly basis at a rate of 0.5 percent AER, NS&I Income Bonds can be considered a “income” investment. On the fifth of each month, interest is deposited into your account (or the next working day if the 5th is a weekend or bank holiday).
You must make a minimum initial payment of £500, and you can withdraw up to £1 million per individual. You are not subject to any fees for withdrawing money from the account as frequently as you wish; however, you are required to maintain a balance of at least £500 in order to keep the account active.
You can add money to your account whenever you like, however the minimum amount for each deposit is £500.
Earned interest is subject to taxation and can be applied toward your personal savings allowance.
What exactly is an NS&I Direct Isa?
The interest rate on the NS&I Direct Isa is 0.35 percent AER, and it is paid out on April 6 of each year. Because it is an Isa with simple access, you are free to withdraw money from it whenever you please.
The rate is variable, which means that it is subject to change at any time. Accounts can be started with as little as one pound, and the annual Isa allowance allows for contributions of up to twenty thousand pounds in each tax year.
Because this is not a flexible Isa, all of the money that you put into it during the year will count against your Isa allowance, regardless of whether or not you take any money out of it.
At this time, NS&I is unable to process any transfers from other providers into the Direct Isa account.
As long as there is at least one pound sterling (or its equivalent) in the account at all times, you are free to make withdrawals of money without incurring any fees or giving prior notice.
Because money that is kept in an Isa wrapper is exempt from taxation, this strategy may be an excellent choice for people who have substantial amounts of savings accumulated.
What exactly is an NS&I Junior Isa?
The NS&I Junior Isa is a type of savings account that is dedicated to helping parents put money away for their kids. It offers an annual percentage yield (AER) of 1.5 percent and adds interest on April 6 of each year.
You can put up to nine thousand pounds ($9,000) in this account for children younger than 18 years old in the fiscal year 2022-2023.
It is not possible to access the money until the child reaches the age of majority. At this point, the money will be moved into an adult Isa, where the individual will have complete choice over how it is spent.
Due to the fact that money held in an Isa is not subject to taxation, it will not count toward the personal savings allowance for the kid.
Describe the NS&I Direct Saver for me.
This is essentially an instant-access savings account that pays an annual percentage yield (AER) of 0.5 percent and pays interest on the first of April each year.
You will need one pound to open the account, but you have the potential to save up to two million. Since the interest rate is variable, it means that it is subject to changes at any time, including increases and decreases.
As long as there is at least one pound sterling in the account at all times, you are free to take money out of the account whenever you like without paying any fees.
Because the interest you earn is subject to taxation, you may owe taxes on the money your savings earn if you have a significant amount of money saved up and have reached or surpassed the limit on the amount of tax-free savings you are allowed to keep.
What exactly is meant by the term “NS&I Investment Account”?
The phrase “investment account” might make you think of something having to do with stocks and shares, but that’s not the case at all.
The fact that accounts can be opened for children under the age of 16 by a parent, guardian, or grandparent sets it apart from other financial institutions. You also have the option of investing in trust for another person.
This savings account offers an annual percentage yield (AER) of 0.01% and pays interest on the first of every January.
The initial deposit is a minimum of twenty pounds, and the maximum amount you can keep is one million pounds.
If the account is in your name, you are free to make withdrawals whenever you choose so long as there is at least one pound in the savings portion of the account.
Certificates of Index-Linked Savings from NS&I
This product is not open to new savers at this time; however, existing account holders still have the opportunity to renew their accounts when their terms come to an end. You are able to renew for as little as one hundred pounds, but you can put away as much as fifteen thousand.
If you put your money into an index-linked savings certificate, it will be safeguarded from the depreciating effects of inflation over a certain amount of time, known as the investment term.
Your savings would receive the same AER as the Retail Prices Index (RPI) measure of inflation, plus 0.01 percent in the past; however, this will be changing to follow the Consumer Prices Index (CPI), which is a significantly lower rate. This change will take place in the near future.
At the moment, you have the choice between a two-year, a three-year, and a five-year term, and the interest rate adjusts annually in response to changes in the cost of living on each anniversary of your investment. Additionally, the interest payment will be made at this time.
Any withdrawals made before the conclusion of the term will result in a loss of interest that is equivalent to 90 days’ worth of earnings.
What exactly are the Fixed Interest Savings Certificates offered by NS&I?
In a manner analogous to that of the index-linked savings certificates, these products entail the investment of a lump sum for a predetermined period of time. However, in contrast to the other accounts, the rates associated with these products remain constant during the entirety of the term.
At this time, a term of two years and a term of five years are both available; however, both terms are only available to existing customers who are renewing an expired certificate.
You are required to save at least £100 and no more than £15,000 total.
You have to pay taxes on the interest you earn, but it counts toward your personal savings allowance. You are free to take withdrawals, but there will be a fee deducted equal to ninety days’ worth of interest from the amount you take out.
Which goods did NS&I discontinue in the most recent period?
A handful of well-liked products are no longer available, not even to their previous clients. We explain what the accounts were and what you ought to do if you had one of them in the past.
bonds with a maturity of 65 years or more that ensure growth.
From January to May of 2015, investors aged 65 and above had access to fixed-term investment options ranging from one to three years in length.
When the bonds reached their maturity date, the funds would have been automatically invested in a standard guaranteed growth bond of the same term if no further instructions were given when the bonds matured. Anyone who had purchased these products should have received a maturity pack that explained their options.
Account for savings with easy access
On July 27, 2012, this account was closed, and any leftover monies would have been transferred to the NS&I residual account at that time.
Cash Isa and Tax-Favored Cash Isa (formerly Tessa-only Isa)
On May 25, 2013, both of these Individual Savings Accounts (Isa) were cancelled, and their balances were subsequently moved into a direct Isa. You have the option of managing this over the phone or online.
Income bonds and capital bonds were guaranteed by retired people.
These bonds have all reached their maturity and been totally redeemed at this point. Any funds that were left in the accounts without further instruction will have been transferred to the NS&I residual account by now.
To get your money back from the residual account, you will need to download the form, print it out, and then send it in.
Ordinary account, Treasurer’s account, SAYE, Annual plan, and Deposit bonds are all examples of financial instruments that fall under this category.
All of these accounts have been closed, and any funds that remained in them have been moved into the residual account maintained by NS&I.
Customers who held any of these accounts and who want their money refunded will also be required to turn in the form for the repayment of residual accounts.
Children’s income bonds issued by NS&I.
NS&I does not provide this product for children any longer; however, if you opened an account for a kid on or before April 5, 2013, and the child was at least seven years old on that date, the child is able to handle the account on their own moving forward.
If they were younger than seven years old on that date, then it is required that it be administered by a responsible adult. Both the interest and the withdrawals will be deposited into an account that has been designated, either in the child’s name or in the name of the person administering the account. After they turn 16, the youngster will be responsible for managing their own account on their own.
Gift tokens and stamps available through National Savings.
These products are no longer available for purchase. If you have any of them, you can have them redeemed at their face value by sending them to NS&I together with your name and address.
You are able to mail them to:
The National Savings and Investments Administration
Glasgow
G58 1SB
Certificates of deposit that are much older (1916-1996)
If you possessed any old savings certificates, we will determine the entire amount that the certificate was worth as of November 10, 2013, based on the amount invested as well as any interest, bonuses, or supplements that were earned on or after that date. Since then, there would not have been any more returns earned.
Specifically, this is the case with the following products:
Certificates of Expenditure for the War (1916–1920) and Savings Certificates with Fixed Interest (1920-1939)
Certificates of deposit bearing a fixed rate of interest (1940-1996)
Certificates of savings index-linked to indices (1975-1990)
Any person who possesses any of these accounts has the option to withdraw their money, reinvest the money into a current savings certificate, or leave their money invested in the same manner in which it is now held.
Questions and Answers Regarding National Savings and Investments
Can I set up a joint account with NS&I?
The majority of financial situations allow for the establishment of joint accounts. Guaranteed Income Bonds, Guaranteed Growth Bonds, Income Bonds, Direct Saver Accounts, and Investment Accounts are various types of securities that can be held jointly with a single other person.
In situations like this, the maximum deposit counts for each individual; hence, if you have an account jointly, the maximum deposit will be double what it would be otherwise.
Premium bonds, Junior Isas, and Direct Isas cannot be opened by two people at the same time.
When you pass away, what will happen to your NS&I accounts?
If you are a member of the deceased person’s family or the person who is responsible for claiming and distributing their assets, you are required to fill out the death claims form that is provided by NS&I.
There is also a step-by-step guide available that is titled Guidance following a bereavement. This guide helps explain the different decisions that you’ll need to make when determining what to do with the accounts of a deceased person and provides helpful explanations for each choice.
This provides information on what to do if there is no will, how inheritance tax may influence the accounts, and what you intend to do with the funds if they are left to you.
Which accounts at NS&I are exempt from taxation?
The government does not levy taxes on the prizes offered by premium bonds, as well as on the monies stored in the Junior and Direct Individual Savings Accounts offered by NS&I.
Any and all interest received from other products is subject to taxation and can be applied to your personal savings allowance.
Where can I find the history of my past NS&I investments?
The tracing service offered by NS&I can be utilised for any assets for which you have lost the associated facts, as well as for the purpose of locating any investments that a deceased person may have owned before their passing.
Fill out a Tracing Service Request form with as many specifics as you can remember about the account, and a member of the NS&I tracing team will start to work on your behalf.
I don’t currently reside in the UK; can I still invest with NS&I?
You can still hold an NS&I account even if you are not physically present in the UK in certain circumstances; however, there are some restrictions on this.
Premium bonds: It is possible to hold premium bonds in nations other than the UK; however, not all governments will sanction this. Because of the regulations regarding gambling and lotteries in the United States, for instance, it’s possible that you won’t be able to purchase premium bonds in that country.
Investment BACS transfers for Guaranteed Growth Bonds can only be received if you have a bank or building society account in the United Kingdom.
To be eligible to receive BACS transfers from Direct Saver, you will need to have an account with a UK bank or building society.
You won’t be able to make any additional payments into your Direct ISA unless you are a resident of the UK.
Junior Isa: In general, children need to be residents of the United Kingdom, but there are exemptions for situations in which the child is a UK Crown servant, is a dependent of a UK Crown servant, or is married to or in a civil partnership with a UK Crown servant.
Income Bonds need that you have a bank or building society account in the United Kingdom in order to receive BACS transactions.
BACS transfers for Guaranteed Growth Bonds can only be received if you have a bank or building society account in the United Kingdom.
If you hold Guaranteed Income Bonds, you will be required to have a bank or building society account in the United Kingdom in order to receive BACS transactions.
You will need to have an account with a UK bank or building society in order to receive BACS transfers if you have an Index-linked Savings Certificate or a Fixed Interest Savings Certificate.
Can NS&I reduce the amount of money saved?
It is true that if a product becomes “too” popular, NS&I has been known to lower the savings rates on it.
Because it is supported by the Treasury, NS&I has something called a “Net Financing objective.” This is a line that NS&I must walk in order to attract enough money so that the government may borrow it, but it must also make sure that it does not take over the market from banks and building societies.
In the event that it appears more likely than not that it will either fall short of or exceed this mark, NS&I will adjust prices appropriately. It’s possible that the fees associated with a certain type of account may be lowered if a lot more individuals opened those accounts.
If the NS&I wants to bring in more deposits, however, the interest rates could be raised as an alternative.
