lostmyname Forumite Posts: 50
Fifth Anniversary 10 Posts Name Dropper
edited 14 September at 11:16AM in Savings & investments

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
    grahamgoo Forumite Posts: 437
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    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
    ColdIron Forumite Posts: 8,047
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    edited 14 September at 10:50AM
    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
Meet your Ambassadors


  • All Categories
  • 338.9K Banking & Borrowing
  • 248.7K Reduce Debt & Boost Income
  • 447.6K Spending & Discounts
  • 230.8K Work, Benefits & Business
  • 600.9K Mortgages, Homes & Bills
  • 171.1K Life & Family
  • 244K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards