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NS&I - Direct Savings vs Income bonds

ChilliBob
Posts: 2,297 Forumite

I have a decent amount in the direct saver, just noticed the AER of the income bonds is slightly higher by 0.03%. From what I can see the only difference is that it pays monthly interest as opposed to annual.
Unless in missing something surely this is a better option than the direct saver?!
Unless in missing something surely this is a better option than the direct saver?!
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Comments
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That's 2.63% AER, both are 2.60% Gross. The extra 0.03% reflects the return if you reinvested the monthly interest for a year0
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The monthly interest can only be paid away with Income Bonds so I don't understand why they've quoted both a gross and AER figure for that account yet the Direct Saver (where interest is credited to the account) is supposedly 2.60% gross/AER. Have they got these the wrong way round ?
One notable difference between the Direct Saver and Income Bonds is that, for Income Bonds, both the minimum balance and the minimum you can take out each time is £500.
I've held Income Bonds myself in the past but the recent rate rise isn't high enough to tempt me back, with so many easy access accounts now around 3%.
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The Direct Saver only pays interest annually so its AER is also 2.60%; the figure isn't accompanied by either descriptor so both are implied based on the tooltip explanations.
2.63% AER for the Income Bonds is possible because despite interest being paid away, you can just transfer it back into the account.
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AmityNeon said:2.63% AER for the Income Bonds is possible because despite interest being paid away, you can just transfer it back into the account.All deposits must be at least £500, from a UK bank account in your own name.1
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ColdIron said:AmityNeon said:2.63% AER for the Income Bonds is possible because despite interest being paid away, you can just transfer it back into the account.All deposits must be at least £500, from a UK bank account in your own name.0
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AmityNeon said:The Direct Saver only pays interest annually so its AER is also 2.60%; the figure isn't accompanied by either descriptor so both are implied based on the tooltip explanations.0
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Cheers all, the £500 I hadn't seen. I did set one up with the minimum balance earlier today. I think the only reason to do it would be to avoid annual 'lumps' for tax reasons in some circumstances. This doesn't make a huge difference to me right now so I guess either or really!0
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AmityNeon said:ColdIron said:AmityNeon said:2.63% AER for the Income Bonds is possible because despite interest being paid away, you can just transfer it back into the account.All deposits must be at least £500, from a UK bank account in your own name.Eco Miser
Saving money for well over half a century1 -
Eco_Miser said:AmityNeon said:ColdIron said:AmityNeon said:2.63% AER for the Income Bonds is possible because despite interest being paid away, you can just transfer it back into the account.All deposits must be at least £500, from a UK bank account in your own name.0
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AmityNeon said:Eco_Miser said:AmityNeon said:ColdIron said:AmityNeon said:2.63% AER for the Income Bonds is possible because despite interest being paid away, you can just transfer it back into the account.All deposits must be at least £500, from a UK bank account in your own name.
Eco Miser
Saving money for well over half a century0
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