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  • FIRST POST
    • RG2015
    • By RG2015 1st Dec 17, 5:43 PM
    • 579Posts
    • 302Thanks
    RG2015
    NS&I 3 Year Bond 2.20%
    • #1
    • 1st Dec 17, 5:43 PM
    NS&I 3 Year Bond 2.20% 1st Dec 17 at 5:43 PM
    I have just noticed that NS&I are now offering a 3 year bond at 2.20% with a maximum of £1 million per person. This is in addition to the 3 year 2.20% bond that is limited to £3,000 per person.

    I assume that this is new as it it not listed on the main MSE savings page. It is though surprising that there has been no publicity about this.

    There are also some other new 1 and 3 year bonds with quite good rates.
Page 2
    • norricorp
    • By norricorp 6th Dec 17, 3:09 PM
    • 13 Posts
    • 4 Thanks
    norricorp
    As someone commented on the article, surely it is better to take the 3 year option and cash in after year and lose 90 days interest. 0.75 of 2.20 is greater than 1.5.
    • jimbow25
    • By jimbow25 6th Dec 17, 4:39 PM
    • 318 Posts
    • 108 Thanks
    jimbow25
    I crunched the numbers and taking into account the 90 day interest penalty, for a 2.2% bond it amounts to the following effective AERs if you withdraw early

    6 months 1.10%
    1 year 1.66%
    1 year 6 months 1.84%
    2 years 1.93%
    2 years 6 months 1.99%
    3 years (minus a day) 2.02%

    Seems like a good bet? Even if rates do go up and you want to break it and re-invest.
    Last edited by jimbow25; 06-12-2017 at 4:41 PM.
    • Krb2609
    • By Krb2609 10th Dec 17, 5:44 PM
    • 2 Posts
    • 1 Thanks
    Krb2609
    Ok, so 1.5% for 1 year, 2.2% for 3 years, but take your money out anytime for 90days loss of interest.

    So if you want to invest for a year, surely: invest for 3-years, take your money out early after 12 months and earn 9 months interest at 2.2% - which equates to 1.65%, in other words 10% higher return than the 1-year deal.

    Is my maths wrong or theirs????
    • RG2015
    • By RG2015 10th Dec 17, 6:13 PM
    • 579 Posts
    • 302 Thanks
    RG2015
    Ok, so 1.5% for 1 year, 2.2% for 3 years, but take your money out anytime for 90days loss of interest.

    So if you want to invest for a year, surely: invest for 3-years, take your money out early after 12 months and earn 9 months interest at 2.2% - which equates to 1.65%, in other words 10% higher return than the 1-year deal.

    Is my maths wrong or theirs????
    Originally posted by Krb2609
    NS&I = State owned savings bank.

    Do we rely on the UK Govt to do maths accurately?

    Oh, and yes, who on earth would choose 1 year in this scenario?
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