NS&I Guaranteed Income Bonds - What term would you choose?

AP3

I have an NS&I Guaranteed Income Bond coming up for maturity. With everything going on in the economy, and the world, which rate/term would you choose?

friolento

None of the above, as I would choose market leading rates

https://moneyfactscompare.co.uk/savings-accounts/fixed-rate-bonds/?sort-filter=standard-order

AP3

https://forums.moneysavingexpert.com/discussion/comment/82160123#Comment_82160123

Yeah, totally understand that, but it's a lot of money (way above FSCS), hence why it's with NS&I. I have other accounts in better places.

RangeRat

1 Year - 4.99% AER

Voted 1 year.

I only ever do 1 year max, retired so move money around a lot. Rates May well be higher in a year the way things are going.

I just opened an NSI income bond last month at 4.82, just cancelled it today (within 30 days) and moved to the newly announced issue at 4.99.

I prefer the income bond so I can get the interest as income, and it spreads it across tax years. Also the amount is well above FSCS. Suits me.

Also have other accounts, and ISAS etc.

wmb194

Do you pay tax on interest? Consider a low coupon gilt instead: coupons are taxed as interest but capital gains are tax free.

https://giltsyield.com/bond/

lascem

3 Years - 5.1% AER

3 years for me.

I had a 2-year guaranteed income bond with NS&I that matured middle of September (less than 120K). I probably would have renewed with them for 3 years had they been offering these improved rates a couple of weeks back. But went with a Kent Reliance 3-year bond fixed at 5.04% monthly interest instead.

Husband and I are retired. I prefer slightly longer fixes so I know how much money is coming in over the medium term, and monthly interest provides an income and spreads the tax. OH prefers shorter terms, rarely fixing for more than 2 years. We have several accounts on the go and usually have an account maturing every 9-12 months or so. We occasionally miss out when savings rates spike and we have no maturing funds, but overall it works for us.

subjecttocontract

I only ever go for 1 year max. I've got £200K in NS&I GGBs, last December they were offered at 4.2%. By January they were on offer at 4.07%. Fixing for more than a year can be a bad idea but we are all different.

friolento

https://forums.moneysavingexpert.com/discussion/comment/82160135#Comment_82160135

I wouldn’t compromise fir the convenience of a single account, and would set up several. I appreciate others prioritise the single access.

fuzzzzy

https://forums.moneysavingexpert.com/discussion/comment/82160344#Comment_82160344

If you think rates have peaked then going for more than a one year fix can be a good idea. I got a great 3 year 6.05% fix in 2023.

However I got some naff 2 year fixes earlier this year because it seemed like rates were definitely on the way down. Wish I'd just stuck to 1 year fixes!

You win some, you lose some.

Maybe the best decision for OP would be to split maturity funds between terms of different length.

Edit: Having said that I still have lots in easy access waiting for rates to increase further but not every one can be bothered with the hassle of that.

AP3

https://forums.moneysavingexpert.com/discussion/comment/82160151#Comment_82160151

This sounds exactly like my situation!

Swipe

1 Year - 4.99% AER

Damn, my 30 days expired on my recently renewed bond just before that new rate came out. Oh well, I have a another one maturing early new year.