Savings

lostmyname

Hello,

I hope you can offer some advice. 

I have received a windfall of 50K that I want to put into a savings account.
Having read the MSE guide to savings, I am set on putting them into an NS&I Bond fixed for 1 year at 6.2%.

Now there are two types of Bonds:
Guaranteed Growth Bond
Guaranteed Income Bond.

I understand that the Growth Bond pays interest annually and the Income one pays monthly...

I am currently not working due to ill health so I am not paying tax, hope this will change soon.

Given the above information am I better off saving into one or other of the two bonds or does it not make any difference at all with regards to my tax position?

Thank you

grahamgoo

The thing with the Income Bond is that you'll get the interest paid out each month, and if you want to carry on earning interest on that money then you'll need a plan to put it in some other account - a regular saver perhaps but it does increase the faff somewhat.  Personally I would go for the Growth Bond unless you need the interest as a regular income.

ColdIron

The GGB will probably pay more but it depends upon what you do with the GIB monthly payments

GGBs pay 6.20% gross/AER

GIBs pay 6.03% gross (what they actually pay) and 6.20% AER (what you would get if the interest compounded). But as the interest is paid away it can't compound. AER is a legal requirement so you can compare rates

If you need the monthly income because you're not working choose GIBs. If you want the most interest choose GGBs

Read this

https://www.moneysavingexpert.com/banking/interest-rates/#save