www.InvestmentGuide.co.uk
www.InvestmentGuide.co.ukOther National
Savings
Bonds and stock
NATIONAL SAVINGS
A lump sum which accumulates interest at a fixed tax free
rate and which should be held for the whole term of 2 or 5 years to gain full
interest.
Some issues pay less than the current issue and might be
worth cashing. Other past issues pay much better interest so you should stay
with them. To check which of your old issues are worth keeping
click here.
Who can invest Anyone.
How worthwhile Poor value for everyone despite recent interest rate rises; Index Linked Certificates are much better value. Also consider instead Bank and Building Society Term Account with a fixed interest rate (some are variable), Life Insurance Growth or Income Bond. Unsuitable for non-taxpayers.
Minimum £100.
Maximum £15,000 for each issue but you can also re-invest any other fixed or index linked issues of savings certificates you hold when they reach their original maturity date after 2 or 5 years. You may hold more if you inherit them. Single maximum applies to joint holdings. Certificates may also be held in trust, thus doubling the maximum investment. You need a special trustee application form. You may buy these in addition to other issues of National Savings Certificates.
Suitable Lump sums.
Money back About 2 weeks. In cash at a post office or by cheque. You get lower interest if you cash early, see list. Ask for a repayment form and post-paid envelope at a post office or bank. At the end of the 2 or 5 year term you will be asked whether you want to cash or re-invest ; if you do nothing your proceeds are automatically re-invested in the current issue of the same term you originally had.
Interest Fixed. For the rates for current and past issues, the year by year rate and which issues should be held and which cashed click here.
Interest paid When certificates cashed. You can draw a yearly 'income' by cashing some of your units but it is better to spend capital, equivalent to the interest, from another investment eg a building society account.
Tax Interest is tax free. It does not have to be declared on a tax return. The same tax exemptions apply to National Savings Index Linked Certificates. Useful as a means of holding money for adult children in an absolute trust as income is tax free and doesn't need to be returned on a tax return.
Fees to pay None.
Passbook None. You get a certificate. If you don't have a holder's number card, you will be given one. This covers all issues of National Savings Certificates. The number should be quoted if you withdraw or buy more certiflcates. You should have a separate holder's card number for each trust holding.
Children Consider instead National Savings Children's Bonus Bond and National Savings Capital Bond. Certificates in the name of a child under 7 can normally be cashed by a parent or guardian.
Risk None. Full value of original investment returned on withdrawal.
How to investOn-line. At post offices. By phone. By post.
Where from Get an application form (including special trustee forms) by phone 0845 964 5000. Also from Post Offices for ordinary forms.
Other National
Savings
Bonds and stock
Last updated 23
June 2008.