NS&I Investment Guaranteed Growth Bond - Incorrect information in MSE Briefing

richardmk

You can keep adding to the account through the full three-year term until you hit the maximum £3,000. But the sooner you get your money in, the more time it has to earn interest.

This is incorrect - additional deposits would be new bonds maturing 3 years from the date of the additional deposit.

Could you check your facts to avoid misleading potential investors!

Neil_Jones

Devil in the detail, but that's changed my way of thinking.

T&C's at
https://www.nsandi.com/files/published_files/asset/pdf/investment-guaranteed-growth-bonds-brochure-print-friendly.pdf

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.

...


24. As Bonds have a specified term, it is not possible to invest further money in a particular Bond once it has been issued. Where a person purchases Bonds of a particular Issue on different dates, a new Bond will be issued in respect of each purchase.

So I wonder if this means for example we can buy £1500 now, to mature in 2020, and £1500 to mature in 2021? Or even 30 bonds at £100 each maturing at say three a month between 2020 and 2021? Either way its still within the limits, doesn't say you can't have 30 bonds, just says you can't have more than £3000 in it overall.

Even then at 30 bonds with £100 in, early withdrawal is only goiing to be the 90 days worth of interest loss, which on £100 is probably no more than £2 if that?

ColdIron

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.

Also

Issues of Bonds

• 7. Each Bond issued belongs to an “Issue” (for example, 3-year Issue 1). Each Issue has a term and specific interest rate that applies to it.
• 8. Any Issue can be withdrawn from sale without notice. An application can only be accepted for Issues on sale on the date of purchase

https://www.nsandi.com/files/published_files/asset/pdf/investment-guaranteed-growth-bonds-brochure-print-friendly.pdf

Neil_Jones

Actually now I've crunched some numbers you get the same interest back whether you tie up £3k in one go or make it up through a series of smaller bonds.

One £3k bond on its own is £3000 + 2.2% = £3066 + 2.2% = £3,133.45 + 2.2% = £3,202.38.

One £250 bond is £250 + 2.2% = £255.50 + 2.2% = £261.12 + 2.2% = £266.87 (rounded up), thus gains interest of £16.87. £16.87 x 12 bonds to max out at £3k per issue = total interest £202.44.

One £1000 bond is £1000 + 2.2% = 1022.20 + 2.2% = £1044.48 + 2.2% = £1067.46, thus gains interest of £67.46. £67.46 x 3 bonds to max out at £3k per issue = £202.38.

Of course this assumes the interest rate remains at 2.2% when you buy.

le_loup

Neil_Jones wrote: »

Actually now I've crunched some numbers you get the same interest back whether you tie up £3k in one go or make it up through a series of smaller bonds.

Hardly surprising.

DawlishDilbert

Can I open e.g. 3 bonds today, each with £3000 in? The wording above doesn't say I can't.

eskbanker

DawlishDilbert wrote: »

Can I open e.g. 3 bonds today, each with £3000 in? The wording above doesn't say I can't.

How do you interpret the phrase about multiple bonds being OK "as long as [...] the total amount you invest isn’t more than £3,000" to mean that you can invest more than £3,000 in total?

DawlishDilbert

Ok I see now. I'm being Thicky McThickface today!

So each time I pay some money in, I am buying a separate bond. I must pay in min £100 each time ( so could buy a max of 30 bonds @ £100 each for instance. Total paid in is £3000.

Thanks.

ColdIron

Yes but don't leave it too late before buying that 30th bond as the 2.2% issue on offer now isn't guaranteed until next April, see my post #3

soulsaver

ColdIron wrote: »

Yes but don't leave it too late before buying that 30th bond as the 2.2% issue on offer now isn't guaranteed until next April, see my post #3

Except apparently conflicting with the Ts&Cs in 'Your Questions Answered:

https://www.nsandi.com/investment-guaranteed-growth-bonds

"How long will the Investment Guaranteed Growth Bond be on sale for?
The Bond will be on sale for 12 months until 10 April 2018".

Trust HMG to add confusion to the mix...

teddysmum

Neil_Jones wrote: »

Even then at 30 bonds with £100 in, early withdrawal is only goiing to be the 90 days worth of interest loss, which on £100 is probably no more than £2 if that?

As you can withdraw part of a bond, the interest lost on £1000, withdrawn early, would be the same, whether taken from one bond or several, so there would be no benefit, in this way, by having multiple bonds. (The benefit would be in being able to invest as and when money became available, because bonds are closed to new additions.)