NS&I 3 Year Bond 2.20%
Options
Comments
-
-
Trying to see how to fund the bonds, is it by FP from a current account?"invest at least £500, paid by a debit card in your own name, issued by a UK bank"
The whole process is very easy.durhamviper wrote: »You buy them from your account on the NS&I site not by FP from bank account0 -
Just been to the NS&I site and logged in.
As pointed out you pay by a UK debit card.
I would imagine they take the payment immediately.
So I`ve held off until tomorrow to be sure all the funds are in place in my current account.0 -
Can I withdraw money?
Yes, before the end of the term you can cash in all or part of your Bond online, by phone or by post with no notice. We will deduct a penalty equal to 90 days’ interest on the amount you cash in. This means that if you cash in within 90 days of buying your Bond, you’ll get back less than you invested. You need to keep a balance of at least £500 to keep your Bond open.
At the end of the term you can cash in with no penalty. We’ll contact you about a month before the end of the term to let you know the options available at that time.
If my maths are correct you could draw out £10k anytime and it would cost you £54.
Someone else already pointed this out but I’ve been looking at the terms on encashment (and it is not clear) which seem to suggest that they don’t net the penalty off the interest, but will calculate it as separate charge. This may mean that you will pay tax on the full interest amount but not receive that amount.63. The amount due when a Bond is cashed in between anniversary dates will be the capitalised value of the Bond (see paragraph 14) (or the original Bond value if the Bond has been held for less than one year) plus interest earned at 1/365th of the annual interest rate for each day held since the last anniversary date (or date of investment if the Bond has been held for less than one year) less any penalty deducted (see paragraphs 50 and 51).0 -
Someone else already pointed this out but I’ve been looking at the terms on encashment (and it is not clear) which seem to suggest that they don’t net the penalty off the interest, but will calculate it as separate charge. This may mean that you will pay tax on the full interest amount but not receive that amount.
Doesn't it mean that you receive your interest and pay tax on it, but you also pay a penalty?
Clearly the penalty is deducted from capital, because if you cash in within the first three months then you get back less than you invested. In such a case you'd incur the penalty plus you'd be liable for a small amount of income tax on the interest you'd accrued.0 -
If you put your whole emergency fund in the bond and then an emergency occurs within the next 3 months and you need to draw out the lot, you would have to pay 3 months interest, so you would lose some capital. My view would be to put some of the emergency fund in the bond, but still keep some of it in instant access funds.
You could split your emergency fund to buy a number of 3 year bonds, so that if cash was needed you would only need to cash in one or more bonds.
I've just bought 4 growth bonds of varying amounts. If I need some ready cash for an emergency I will only lose the 90 day interest on the bonds I need to cash.
No longer trainee
Retired in 2012 (54)
State pension due 2024 (66)
0 -
You can make a partial withdrawal from a single bond and only lose 90 days interest on the amount you withdraw.traineepensioner wrote: »You could split your emergency fund to buy a number of 3 year bonds, so that if cash was needed you would only need to cash in one or more bonds.
I've just bought 4 growth bonds of varying amounts. If I need some ready cash for an emergency I will only lose the 90 day interest on the bonds I need to cash.
NS&I Guaranteed Growth Bond Summary Sheet PDF
Can I withdraw money?
Yes, before the end of the term you can cash in all or part of your Bond online, by phone or by post with no notice. We will deduct a penalty equal to 90 days’ interest on the amount you cash in. You need to keep a balance of at least £500 to keep your Bond open.
At the end of the term you can cash in with no penalty. We’ll contact you about a month before the end of the term to explain the options available at that time.0 -
capital0ne wrote: »Better than nothing but still losing 0.7% due to inflation - go for stocks and shares instead
it's a completely different approach, but i tend to agree. to tie-up money for so long with such little return doesn't make a lot of sense to me. the only product i'm seeing from NS&I that appeals is Premium Bonds - at least they offer a bit of fun, and a change, albeit small, to get a big return.0 -
Multiple bonds are worth considering if you can stage your investments. That way, hopefully one will be due to mature if you need the money, so no penalty to pay.0
-
seems like a good deal compared to current interest rates, even those promotional ones.
the interest penalty on withdrawals isn't all that great as it is in effect an insurance policy against rising rates, as you can always put your money elsewhere if they rise (substantially) over the next three year period.0
This discussion has been closed.
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608.1K Mortgages, Homes & Bills
- 173.1K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards