NS&I Maturing Bond

NigelH1205

I took out a NS&I 65+ Guaranteed Growth Bond in January 2015. I invested £10,000 at the interest rate of 4% Gross/AER.

I expected the maturing bond to be worth £11248.64 which is 3 years compounded at 4% with interest calculated annually but the letter tells me the maturing fund is £11,163.29.

Can anybody explain why?

ivormonee

Are the dates exactly 3 years? There seems to be a shortfall of around 80 days otherwise.

talexuser

Is the amount the final total, or the running total at the date of the letter?

Ken68

Go to your account online, look up transaction history. You will see tax deducted.

xylophone

The interest on the GGB is taxable.

Tax would have been deducted on the payment of interest made in January 2016 - interest has been paid gross in January 2017 and will be paid gross on maturity in 2018.