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  • FIRST POST
    • tara747
    • By tara747 4th Oct 17, 1:53 PM
    • 10,091Posts
    • 26,642Thanks
    tara747
    NS&I Guaranteed Growth Bond
    • #1
    • 4th Oct 17, 1:53 PM
    NS&I Guaranteed Growth Bond 4th Oct 17 at 1:53 PM
    I have some fixed-rate savers coming to an end, and am debating what to do with the money. I'm also concerned about the stability of the banking system and want my money to be safe.

    I'm considering the NS&I Guaranteed Growth Bond - it pays 2.2% per year for 3 years. There's a 90-day interest penalty if I need early access, but even so.

    Say I need all the money in 12 months' time. Even with the penalty, I'll still be quids in compared with the Direct Saver (0.7%) or most of the savings accounts on offer at the moment.

    Thoughts???? Or does anyone have one?

    https://www.nsandi.com/investment-guaranteed-growth-bonds
    Get to 119lbs! 1/2/09: 135.6lbs 1/5/11: 145.8lbs 30/3/13 150lbs 22/2/14 137lbs 2/6/14 128lbs 29/8/14 124lbs 2/6/17 126lbs
    Save £120,000 by 31 Dec 2017! Dec 2011: £54,342 * Dec 2012: £62,200 * Dec 2013: £74,127 * Dec 2014: £84,839 * Dec 2015: £95,207 * Dec 2016: £109,122
    eBay sales - £4,559.89 Cashback - £2,109.36
Page 1
    • Neil Jones
    • By Neil Jones 4th Oct 17, 2:44 PM
    • 1,013 Posts
    • 559 Thanks
    Neil Jones
    • #2
    • 4th Oct 17, 2:44 PM
    • #2
    • 4th Oct 17, 2:44 PM
    Look at it this way:

    A year's interest is IIRC £66 on that. The penalty of 90 days interest is about £16. So if you had to cash the bond in in 12 months time you'd still gain £50.

    Nowhere else can you fix for three years with the option of early withdrawal for that interest rate on that penalty. Even in the ISA market a five year fix is 2.15% but with 180 days interest penalty this can be more costly.

    Therefore the NS&I Bond is a bit of a no brainer.
    • chockydavid1983
    • By chockydavid1983 4th Oct 17, 3:25 PM
    • 481 Posts
    • 287 Thanks
    chockydavid1983
    • #3
    • 4th Oct 17, 3:25 PM
    • #3
    • 4th Oct 17, 3:25 PM
    Cool, looks like a decent option for those who've exhausted the best current accounts/ regular savers.
    • EachPenny
    • By EachPenny 4th Oct 17, 4:12 PM
    • 3,278 Posts
    • 6,039 Thanks
    EachPenny
    • #4
    • 4th Oct 17, 4:12 PM
    • #4
    • 4th Oct 17, 4:12 PM
    Cool, looks like a decent option for those who've exhausted the best current accounts/ regular savers.
    Originally posted by chockydavid1983
    Perhaps, but if you've exhausted the best current accounts/regular savers then that's a lot of cash you've spread around already, in which case you'd probably be someone with a high level of confidence in the banking system.... which the OP doesn't seem to have.

    The other factor is new accounts are starting up on a regular basis, so for example in less than two month's time it is likely Virgin will have another two regular savers at 2.25% (perhaps more if the base rate increases). So in the first month there the OP (assuming all other options had been used) would have an extra £500 earning 2.25% rather than fixed at 2.2% with NS&I.

    The OP also mentions the ability to get at the money, and whilst beating the 0.7% easy access rate after year 1 is possible, the OP should actually be comparing with something like Tesco or Ford Money where easy access pays 1.1x%.

    I have some fixed-rate savers coming to an end, and am debating what to do with the money. I'm also concerned about the stability of the banking system and want my money to be safe.

    Thoughts???? Or does anyone have one?
    Originally posted by tara747
    So long as you keep your deposits below £85k with a FSCS institution then your money will be safe. For added protection many people split their money between different banking groups which means even if one has problems and there is a delay in accessing funds, one of the other banks should still be functioning and you'll be able to access some of your money with no disruption.

    The Guaranteed Growth Bond is not a bad account, it just isn't a particularly good one unless you have quite specific financial circumstances. Unless I'm misreading your post I'm not sure those circumstances apply to you.
    "In the future, everyone will be rich for 15 minutes"
    • tara747
    • By tara747 4th Oct 17, 5:42 PM
    • 10,091 Posts
    • 26,642 Thanks
    tara747
    • #5
    • 4th Oct 17, 5:42 PM
    • #5
    • 4th Oct 17, 5:42 PM
    Look at it this way:

    A year's interest is IIRC £66 on that. The penalty of 90 days interest is about £16. So if you had to cash the bond in in 12 months time you'd still gain £50.

    Nowhere else can you fix for three years with the option of early withdrawal for that interest rate on that penalty. Even in the ISA market a five year fix is 2.15% but with 180 days interest penalty this can be more costly.

    Therefore the NS&I Bond is a bit of a no brainer.
    Originally posted by Neil Jones
    Yeah, that's what I'm thinking. Even with the penalty, it's still a good product in the current market.


    Perhaps, but if you've exhausted the best current accounts/regular savers then that's a lot of cash you've spread around already, in which case you'd probably be someone with a high level of confidence in the banking system.... which the OP doesn't seem to have.

    The other factor is new accounts are starting up on a regular basis, so for example in less than two month's time it is likely Virgin will have another two regular savers at 2.25% (perhaps more if the base rate increases). So in the first month there the OP (assuming all other options had been used) would have an extra £500 earning 2.25% rather than fixed at 2.2% with NS&I.

    The OP also mentions the ability to get at the money, and whilst beating the 0.7% easy access rate after year 1 is possible, the OP should actually be comparing with something like Tesco or Ford Money where easy access pays 1.1x%.

    So long as you keep your deposits below £85k with a FSCS institution then your money will be safe. For added protection many people split their money between different banking groups which means even if one has problems and there is a delay in accessing funds, one of the other banks should still be functioning and you'll be able to access some of your money with no disruption.

    The Guaranteed Growth Bond is not a bad account, it just isn't a particularly good one unless you have quite specific financial circumstances. Unless I'm misreading your post I'm not sure those circumstances apply to you.
    Originally posted by EachPenny
    I know I'm being a scaremonger, but I actually fear a scenario in which a major bank collapses and the FSCS doesn't have enough money to pay out. Isn't it paid for by the remaining banks?

    The other point is that I'm looking for somewhere to put around £100,000, so regular savers just won't cut it.
    Get to 119lbs! 1/2/09: 135.6lbs 1/5/11: 145.8lbs 30/3/13 150lbs 22/2/14 137lbs 2/6/14 128lbs 29/8/14 124lbs 2/6/17 126lbs
    Save £120,000 by 31 Dec 2017! Dec 2011: £54,342 * Dec 2012: £62,200 * Dec 2013: £74,127 * Dec 2014: £84,839 * Dec 2015: £95,207 * Dec 2016: £109,122
    eBay sales - £4,559.89 Cashback - £2,109.36
    • tara747
    • By tara747 4th Oct 17, 5:43 PM
    • 10,091 Posts
    • 26,642 Thanks
    tara747
    • #6
    • 4th Oct 17, 5:43 PM
    • #6
    • 4th Oct 17, 5:43 PM
    Thanks for all your input so far!
    Get to 119lbs! 1/2/09: 135.6lbs 1/5/11: 145.8lbs 30/3/13 150lbs 22/2/14 137lbs 2/6/14 128lbs 29/8/14 124lbs 2/6/17 126lbs
    Save £120,000 by 31 Dec 2017! Dec 2011: £54,342 * Dec 2012: £62,200 * Dec 2013: £74,127 * Dec 2014: £84,839 * Dec 2015: £95,207 * Dec 2016: £109,122
    eBay sales - £4,559.89 Cashback - £2,109.36
    • ab56
    • By ab56 4th Oct 17, 5:56 PM
    • 16 Posts
    • 20 Thanks
    ab56
    • #7
    • 4th Oct 17, 5:56 PM
    • #7
    • 4th Oct 17, 5:56 PM
    Hi Tara


    Unfortunately the maximum you can deposit in the NS & I bond you refer to is only £3000.
    • ColdIron
    • By ColdIron 4th Oct 17, 6:08 PM
    • 3,661 Posts
    • 4,403 Thanks
    ColdIron
    • #8
    • 4th Oct 17, 6:08 PM
    • #8
    • 4th Oct 17, 6:08 PM
    I know I'm being a scaremonger, but I actually fear a scenario in which a major bank collapses and the FSCS doesn't have enough money to pay out. Isn't it paid for by the remaining banks?
    Originally posted by tara747
    In the unlikely event that the FSCS or the BoE cannot offer full protection and a major bank fails, you (and we) will suffer the consequences whether or not you have a few grand with them

    The other point is that I'm looking for somewhere to put around £100,000, so regular savers just won't cut it.
    And the NS&I Guaranteed Growth Bond will?
    • Stubod
    • By Stubod 4th Oct 17, 6:21 PM
    • 432 Posts
    • 275 Thanks
    Stubod
    • #9
    • 4th Oct 17, 6:21 PM
    • #9
    • 4th Oct 17, 6:21 PM
    ..yep ..a great product, "and a no brainer" for a safe "investment , (we have one each), ..but again you are only allowed to put £3k max into it...
    • jimjames
    • By jimjames 4th Oct 17, 8:17 PM
    • 12,237 Posts
    • 10,772 Thanks
    jimjames
    Hi Tara


    Unfortunately the maximum you can deposit in the NS & I bond you refer to is only £3000.
    Originally posted by ab56
    Their website is very misleading. Under the reasons there is absolutely no mention of maximum limits, just that you need more than £100
    Remember the saying: if it looks too good to be true it almost certainly is.
    • Stubod
    • By Stubod 4th Oct 17, 9:12 PM
    • 432 Posts
    • 275 Thanks
    Stubod
    ..sorry to disagree, but I looked on each page and the £3,000 max limit is mentioned on all of them as far as I can see.....but yes it is extremely disappointing since they no longer offer any index linked bonds either (and these had a more reasonable "cap" of £15k....)
    • tara747
    • By tara747 5th Oct 17, 9:57 AM
    • 10,091 Posts
    • 26,642 Thanks
    tara747
    Oh, I hadn't seen the £3,000 limit

    Thanks to everyone for pointing that out.
    Get to 119lbs! 1/2/09: 135.6lbs 1/5/11: 145.8lbs 30/3/13 150lbs 22/2/14 137lbs 2/6/14 128lbs 29/8/14 124lbs 2/6/17 126lbs
    Save £120,000 by 31 Dec 2017! Dec 2011: £54,342 * Dec 2012: £62,200 * Dec 2013: £74,127 * Dec 2014: £84,839 * Dec 2015: £95,207 * Dec 2016: £109,122
    eBay sales - £4,559.89 Cashback - £2,109.36
    • Eco Miser
    • By Eco Miser 5th Oct 17, 12:07 PM
    • 3,224 Posts
    • 2,989 Thanks
    Eco Miser
    I know I'm being a scaremonger, but I actually fear a scenario in which a major bank collapses and the FSCS doesn't have enough money to pay out. Isn't it paid for by the remaining banks?
    Originally posted by tara747
    And Building Societies, and Credit Unions, and IFAs and ....
    If the FSCS runs out of cash they can borrow from the Treasury to meet the immediate needs.
    Apart from that, if the banking system collapses, we're all in trouble whether we have money to lose or not.
    Eco Miser
    Saving money for well over half a century
    • jimjames
    • By jimjames 5th Oct 17, 12:15 PM
    • 12,237 Posts
    • 10,772 Thanks
    jimjames
    ..sorry to disagree, but I looked on each page and the £3,000 max limit is mentioned on all of them as far as I can see.....but yes it is extremely disappointing since they no longer offer any index linked bonds either (and these had a more reasonable "cap" of £15k....)
    Originally posted by Stubod
    I searched again and yes I could see the £3k amongst some other details. In the headline info there is no mention and to it certainly is important enough to be there especially when they mention £100 min:

    Suitable for savers who:

    are happy to invest and manage their Bond online
    want their interest to build up so their investment grows in value
    want to know exactly what return they’ll get
    can leave their money invested for three years
    have £100 or more to invest

    Not for savers who:

    want to invest by phone or post
    want a regular income from their investment
    think they might need access to their money early
    want to invest in trust
    Remember the saying: if it looks too good to be true it almost certainly is.
    • tara747
    • By tara747 19th Oct 17, 11:01 AM
    • 10,091 Posts
    • 26,642 Thanks
    tara747
    How many of these bonds can each person have? I can't find this info on the NS&I site.
    Get to 119lbs! 1/2/09: 135.6lbs 1/5/11: 145.8lbs 30/3/13 150lbs 22/2/14 137lbs 2/6/14 128lbs 29/8/14 124lbs 2/6/17 126lbs
    Save £120,000 by 31 Dec 2017! Dec 2011: £54,342 * Dec 2012: £62,200 * Dec 2013: £74,127 * Dec 2014: £84,839 * Dec 2015: £95,207 * Dec 2016: £109,122
    eBay sales - £4,559.89 Cashback - £2,109.36
    • IanManc
    • By IanManc 19th Oct 17, 11:20 AM
    • 367 Posts
    • 544 Thanks
    IanManc
    How many of these bonds can each person have? I can't find this info on the NS&I site.
    Originally posted by tara747
    The minimum amount you can purchase is £100, and you get a new bond for each purchase. The maximum investment is £3000, so you could have 30 £100 bonds - but it would be a bit daft.
    • eskbanker
    • By eskbanker 19th Oct 17, 11:21 AM
    • 5,890 Posts
    • 5,850 Thanks
    eskbanker
    How many of these bonds can each person have? I can't find this info on the NS&I site.
    Originally posted by tara747
    https://www.nsandi.com/files/published_files/asset/pdf/investment-guaranteed-growth-bonds-brochure-print-friendly.pdf clarifies that you can have more than one but that there isn't really any point in doing so given the overall cap on your investment:
    Can I buy more than one Bond?
    Yes, as long as each investment you make is at least £100 and the total amount you invest isn’t more than £3,000.
    • ColdIron
    • By ColdIron 19th Oct 17, 11:40 AM
    • 3,661 Posts
    • 4,403 Thanks
    ColdIron
    Still on issue 1 I see
    • tara747
    • By tara747 25th Oct 17, 4:55 PM
    • 10,091 Posts
    • 26,642 Thanks
    tara747
    Thanks all! I was hoping to have several £3,000 bonds Back to the drawing board...
    Get to 119lbs! 1/2/09: 135.6lbs 1/5/11: 145.8lbs 30/3/13 150lbs 22/2/14 137lbs 2/6/14 128lbs 29/8/14 124lbs 2/6/17 126lbs
    Save £120,000 by 31 Dec 2017! Dec 2011: £54,342 * Dec 2012: £62,200 * Dec 2013: £74,127 * Dec 2014: £84,839 * Dec 2015: £95,207 * Dec 2016: £109,122
    eBay sales - £4,559.89 Cashback - £2,109.36
    • Mr K
    • By Mr K 25th Oct 17, 8:33 PM
    • 1,107 Posts
    • 659 Thanks
    Mr K
    If you make it a joint account you can invest £6k. Still not massive, but better than anything else out there.
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