NS&I Guaranteed Income Bonds - Locked into very low interest rate and looks like no way out!

Hi, Thank you for letting me join this forum.
I have an investment with NS&Is’ Guaranteed Income Bonds which is locked in for 3 years. At the time it felt like a good investment.
Unfortunately, there seems no way out of this investment and I am now stuck with a very low interest rate of 0.34% for the final 2 years of the investment.
Has anyone else fallen into this trap?
I notice the NS&I no longer sell this investment.

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  • Exodi
    Exodi Posts: 2,789
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    edited 15 August 2022 at 9:36AM
    Hi, Thank you for letting me join this forum.
    I have an investment with NS&Is’ Guaranteed Income Bonds which is locked in for 3 years. At the time it felt like a good investment.
    Unfortunately, there seems no way out of this investment and I am now stuck with a very low interest rate of 0.34% for the final 2 years of the investment.
    Has anyone else fallen into this trap?
    I notice the NS&I no longer sell this investment.

    NS&I aren't the only company that offer fixed income bonds or fixed savings products - though it is well known that they are rarely competitive.

    https://www.nsandi.com/help/manage-your-savings/maturing-investments/guaranteed-income-bonds

    May be worth calling them or speaking to live chat to understand your options.
    Know what you don't
  • Daliah
    Daliah Posts: 3,792
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    edited 15 August 2022 at 9:41AM
    When did you take out your bond, and if it was renewed, what was the last renewal date?

    The terms for early withdrawal from this account are on the NS&I website, and you will have agreed to them at the time you took out, and renewed if applicable, the bond.

    If you took out the Bond after April 30 2019, there is no option other than waiting for maturity. That's the nature of fixed term accounts, I am afraid.

    If you took it out before then, there is an option to close it at a penalty.


  • solidpro
    solidpro Posts: 446
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    I really don't get all this chasing investments that are seemingly worse than worthless. 0.34% locked for 3 years? If I had £500, I'd rather go and put £50 of it on black than waste 30 minutes setting up some account which pays less than nothing over 3 years against inflation.
  • dunstonh
    dunstonh Posts: 115,720
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    I have an investment with NS&Is’ Guaranteed Income Bonds which is locked in for 3 years. At the time it felt like a good investment.
    They haven't really been a good investment for decades.

    Unfortunately, there seems no way out of this investment and I am now stuck with a very low interest rate of 0.34% for the final 2 years of the investment.
    Has anyone else fallen into this trap?
    Plenty.    Fixed term deposits usually have no ability to access them during the term.   This is quite normal.  NS&I moved to this method some years back.






    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Malthusian
    Malthusian Posts: 10,838
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    solidpro said:
    I really don't get all this chasing investments that are seemingly worse than worthless. 0.34% locked for 3 years? If I had £500, I'd rather go and put £50 of it on black than waste 30 minutes setting up some account which pays less than nothing over 3 years against inflation.
    At 0.34% for 3 years, this is almost certainly an auto-renewal of a matured NS&I product.
    If so, it's the opposite - the opportunity loss of interest and access to the money is the price the OP willingly paid for not spending 30 minutes cashing in the NS&I bond and reinvesting it into a new 3-year bond paying 2% or whatever the best-buy rate was at the time. Or 10 minutes cashing in the NS&I bond and keeping it in their current account earning 0%.
  • Olinda99
    Olinda99 Posts: 1,195
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    Look on the bright side - you are helping your country by allowing NS&I to pay you substantially less interest than the current market rate for a similar bond.
  • The catch was that they only allowed 30 days to cash-in and if you missed it, you were locked in for another 3 years at 0.4% or so.  I don't see the justification for the 30-day limit and the negligible rate thereafter.  It was just a rip off.  I shall not save with NS&I again on principle if this is how they behave.
  • Stubod
    Stubod Posts: 2,137
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    edited 29 December 2023 at 10:23PM
    LOL......Why do you consider it a "trap" and why a "catch", and why is 30 days not enoug...how many more days do you need????.
    ...a typical "everybody's fault but mine" for not bothering to read the T&C's.....and not bothering to check the renewal e-mails......
    .."It's everybody's fault but mine...."
  • Stubod said:
    LOL......Why do you consider it a "trap" and why a "catch", and why is 30 days not enoug...how many more days do you need????.
    ...a typical "everybody's fault but mine" for not bothering to read the T&C's.....and not bothering to check the renewal e-mails......
    LOL indeed. cant ever recall seeing the use of four question marks, really need that answer?
    Thankfully so far, your rant is an isolated diatribe amongst otherwise helpful replies in this thread. 
  • Kim_13
    Kim_13 Posts: 2,223
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    If there has been a change of circumstances which means you are now struggling to meet your basic expenses, I would try appealing to NS&I. After all, they are state owned and if someone had £16,000 in one of these they would be denied means tested benefits - but can’t actually afford to live unless they are able to access those savings.

    I do wish there was a system to give advance instructions if desired, e.g. Place in instant access; renew if paying the same or better than the original product. Some providers are lax with the paperwork it seems and where that is the case, it’s harder to avoid falling into an unwanted renewal (I have seen worse terms than 30 days to get out.)
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