NSandI guaranteed growth and income bonds

epigeus

Am new to mse so forgive me if i am on the wrong forum my question is if i invest lets say £10,000 in a guaranteed income bond at 5% i will receive £42 a month interest a month i can reinvest in a direct saver at 3.4% now my question is if i invest £10,000 in a growth bond  at 5% i again receive £42, a month so in month 2 my investment will be £10,042 will i be paid 5% on £10,042 or on £10,000

refluxer

Interest is only paid on maturity for a guaranteed growth bond, so your return for the year will be 5% - ie. a £10k deposit will earn £500 in interest, which is the same as the total amount you will have had paid out with a guaranteed income bond over the same period.

FWIW, I wouldn't entertain any of these options though because you can currently earn around 6% for 1 year and up to 4.60% in the best easy access accounts elsewhere.

https://savingschampion.co.uk/best-buys/personal/fixed-rate-bond

https://savingschampion.co.uk/best-buys/personal/easy-access-accounts

epigeus

thanks refluxer i will have a look at these sites