Ns&i

rob78

Hi, NS&I income bonds are 1.15% and direct saver is 1%. The name bonds makes me nervous, is it a normal savings account? If so why would anyone select a direct saver over a income bonds account?
Thanks
Rob

colsten

NS&I Income Bonds is a normal easy access saver with a couple conditions attached:

1. you can only deposit or withdraw in sums of at least £500
2. interest is paid monthly into a different account (current account, NS&I Direct Saver etc), i.e. doesn't compound

The main reason people would use the Direct Saver is the £500+ requirement of the Income Bonds. Or if they have more than £1m to park in a cash account 

RG2015

rob78 said:

Hi, NS&I income bonds are 1.15% and direct saver is 1%. The name bonds makes me nervous, is it a normal savings account? If so why would anyone select a direct saver over a income bonds account?
Thanks
Rob

NS&I Income Bonds have a minimum transaction value of £500. If someone did not have £500 to deposit they could open a Direct Saver account. The Income Bond account is fine and there is no reason to be nervous as the money is 100% safe here.

There are several threads here with information and opinion and the NS&I website is very informative.

https://forums.moneysavingexpert.com/search?adv=1&search=NS%26I&title=&author=&cat=all&tags=&discussion_d=1&comment_c=1&discussion_poll=1&within=1+day&date=

rob78

Thanks Colsten, income bonds it is then!

Ifts

Also covered in this thread:

https://forums.moneysavingexpert.com/discussion/6176036/are-ns-i-income-bonds-better-than-the-highest-interest-easy-access-savings-accounts/p1

kUrGaN_UK

Just adding my recent experience of both these accounts. Initial opening Funds transfer took at least a week to show as 'available funds' in both accounts, which was slightly worrying. Now trying to make a withdrawal from the Direct Saver and it's most certainly not easy access in the modern day sense. They say if you make a request on a Monday, for example, your funds will be available on the following banking day.......by the end of that day. So, no faster payments for the Direct Saver, it's like the olden days where your funds drop into a Black Hole of mystery for a couple of days. They even have a withdrawal calculator to give you an idea when your funds will be available for you, so it irks me a little when these are pushed as instant access / easy access. I made a request online yesterday at 10am thinking I'd have the funds later that day at worst and it's after Midday on Day 2 and I'm still waiting, thinking now these funds won't appear until a minute before Midnight. My fault, I should have read the Withdrawal information and seen the calculator, but just to be aware, definitely not 'instant access'.  

eskbanker

Faster Payments means 'by close of next working day', although for most transfers between direct participants of the scheme it's close to instantaneous, as explained at https://www.fasterpayments.org.uk/faqs

How long do Faster Payments take?

Provided the sending and receiving bank/building society are Direct Participants of Faster Payments, payments are usually available almost immediately, although they can sometimes take up to two hours. 

[...]

As a minimum, all financial institutions in the UK must abide by the Payment Services Directive (PSD) -  this states that any payments made by mobile, internet or phone banking (including standing orders) must arrive by the end of the following business day at the latest.

Instant or easy access means that there's no need to give advance notice of withdrawals and doesn't signify that withdrawn funds will arrive at a certain speed....

Thrugelmir

kUrGaN_UK said:

Just adding my recent experience of both these accounts. Initial opening Funds transfer took at least a week to show as 'available funds' in both accounts, which was slightly worrying. Now trying to make a withdrawal from the Direct Saver and it's most certainly not easy access in the modern day sense. They say if you make a request on a Monday, for example, your funds will be available on the following banking day.......by the end of that day. So, no faster payments for the Direct Saver, it's like the olden days where your funds drop into a Black Hole of mystery for a couple of days. They even have a withdrawal calculator to give you an idea when your funds will be available for you, so it irks me a little when these are pushed as instant access / easy access. I made a request online yesterday at 10am thinking I'd have the funds later that day at worst and it's after Midday on Day 2 and I'm still waiting, thinking now these funds won't appear until a minute before Midnight. My fault, I should have read the Withdrawal information and seen the calculator, but just to be aware, definitely not 'instant access'.  

NSI is not a bank in the true sense. Only risen to the fore as the the UK needs to borrow to fund the crisis. .

dont_look_now

Thrugelmir said:

NSI is not a bank in the true sense. Only risen to the fore as the the UK needs to borrow to fund the crisis. .

The UK does not need to borrow to fund the crisis. It can fund it with either cash (via QE) or borrowing, or a mixture of the two. It is in fact using a mixture.

Within the part of funding that comes from borrowing, NS&I is a more expensive form of borrowing than gilts. NS&I has come to the fore because NS&I interest rates have been held steady, when other rates have been falling, to help savers. It would have saved public money to cut NS&I rates in line with the rest of the savings market and, when as a result less money was deposited with NS&I, instead borrowed more cheaply by issuing more gilts. It was a deliberate policy to keep NS&I rates up (and as it happens, one of the few government policies I agree with).

colsten

kUrGaN_UK said:

Just adding my recent experience of both these accounts. Initial opening Funds transfer took at least a week to show as 'available funds' in both accounts, which was slightly worrying. Now trying to make a withdrawal from the Direct Saver and it's most certainly not easy access in the modern day sense. They say if you make a request on a Monday, for example, your funds will be available on the following banking day.......by the end of that day. So, no faster payments for the Direct Saver, it's like the olden days where your funds drop into a Black Hole of mystery for a couple of days. They even have a withdrawal calculator to give you an idea when your funds will be available for you, so it irks me a little when these are pushed as instant access / easy access. I made a request online yesterday at 10am thinking I'd have the funds later that day at worst and it's after Midday on Day 2 and I'm still waiting, thinking now these funds won't appear until a minute before Midnight. My fault, I should have read the Withdrawal information and seen the calculator, but just to be aware, definitely not 'instant access'.  

Why, even after you have discovered the withdrawal calculator, are you complaining that you will get your withdrawal when NS&I say you would get it?

Why, if you have an issue with the deposit and withdrawal processing times NS&I have, did you choose to deposit money with NS&I?

coachman12

dont_look_now said:

Thrugelmir said:

NSI is not a bank in the true sense. Only risen to the fore as the the UK needs to borrow to fund the crisis. .

The UK does not need to borrow to fund the crisis. It can fund it with either cash (via QE) or borrowing, or a mixture of the two. It is in fact using a mixture.

Within the part of funding that comes from borrowing, NS&I is a more expensive form of borrowing than gilts. NS&I has come to the fore because NS&I interest rates have been held steady, when other rates have been falling, to help savers. It would have saved public money to cut NS&I rates in line with the rest of the savings market and, when as a result less money was deposited with NS&I, instead borrowed more cheaply by issuing more gilts. It was a deliberate policy to keep NS&I rates up (and as it happens, one of the few government policies I agree with).

A poster who never quite seems to grasp the correct information.
The NS&I was , before Covid, told by the Government to raise £6 billion extra this financial year .
Now the Government has told NS&I to raise £ 35 billion by next April in order to help finance Covid expenditure. So, of course the Government is using NS&I as a "borrowing" tool ! And why not , especially as the plan is working ( in all my time using NS&I , I have never seen it so highly used even though it has always had about 25 million savers in recent years, much more now of course).
And the Govt does not agree that cutting NS&I interest rates should be lowered in line with other savings "banks" and neither do I nor most observers. If that were so, would an agency of The Chancellor of the Exchequer (NS&I )  be drumming up business for savers ? No, it would not.
True, it is not a Bank in the strict sense but it has been referred to as the UK's Savings Bank for decades. I use it because of the fact that I need the extra protection far above the normal FSCS protection limits. But there is no doubt that NS&I, especially with its new Govt strategy, will play a part in the the wide range of measures which the Govt will use to finance the Covid debts.