NS&I 3 Year Bond 2.20%

talexuser

OldMusicGuy wrote: »

So in the short term at least this is a zero risk, slightly above inflation investment.

In the short term this is a below inflation return with CPI now 3% and RPI 4%. It all depends how much and how long inflation falls below target 2% in the latter half of the term, which is a big if. The risk factor is the biggest draw for those interested.

OldMusicGuy

Inflation has spiked due to the fall in Sterling. The effects of that seem to have worked through, hence the lower forecasts. IMO it's not a big if to see inflation going down to 2% or lower. That's the government's target and interest rates are on the way up. Of course, YMMV and no-one really knows for sure.

I don't believe in measures like CPI and RPI anyway, because you can easily reduce your outgoings through lifestyle adjustments and clever purchasing. 2.2% with no risk looks pretty good to me, although there are other options.

Of course, I still have a lot of money invested in the market. Like I said, this could be a good component of a balanced portfolio.

claire07

I may be missing the obvious but could you please show a link to the new 3 year bond at 2.2% on the NS&I website. I can only find the one limited to £3000 which I already have.


Many thanks.

ColdIron

It's the Guaranteed Growth Bonds (the one in orange)
https://www.nsandi.com/guaranteed-growth-bonds

claire07

Many thanks for that - I was searching the NS&I site but must have missed it.

chucknorris

caveman38 wrote: »

The earlier one Investment Guaranteed Growth Bond Issue 1 as you say limited to £3K. This new one is just Guaranteed Growth Bond as you say £1M limit. It says Issue 56/62.
Were there earlier issues then?

What a strange name 'Guaranteed growth bond', how the hell did they come up with that? 2.2% less 40% tax = 1.32% net nominal growth, but less inflation = at least -0.5%! Guaranteed to lose in real terms bond' would have been far more apt. Or am I missing something?

RG2015

chucknorris wrote: »

What a strange name 'Guaranteed growth bond', how the hell did they come up with that? 2.2% less 40% tax = 1.32% net nominal growth, but less inflation = at least -0.5%! Guaranteed to lose in real terms bond' would have been far more apt. Or am I missing something?

Definitely a case of mis-selling. It will become known as the Govt GGB scandal and £billions will be paid paid out in compensation over the next 25 years bankrupting the government.

Eco_Miser

chucknorris wrote: »

What a strange name 'Guaranteed growth bond', how the hell did they come up with that? 2.2% less 40% tax = 1.32% net nominal growth, but less inflation = at least -0.5%! Guaranteed to lose in real terms bond' would have been far more apt. Or am I missing something?

1. marketing
2. any mathematician will tell you growth is a signed quantity, and can be negative
3. 'Guaranteed' may just refer to being backed by HM Treasury.
4. at least this one doesn't have 'investment' in the name.
5. some of us don't pay 40% tax - or 20% tax either.

Former_MSE_Andrea

Hi all

Our team's written a story with MSE's stance on how the new fixed savings bonds stack up.

NS&I launches new fixed savings bonds - how do they stack up?

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.