NS&I Income Bonds

MelG69

Please could anyone tell me if I was to put £140,000 into an NS&I Income Bond, would the full amount be protected by the Government? I keep reading that you should not put more than £35,000 into any one bank but does that rule still apply with NS&I? Many thanks.

Kavanne

I think all your money is safe in NS&I and Northern Rock now.

dunstonh

NS&I is the Govt. Its one of the reasons that NS&I is not regulated by the FSA and you have no FOS protection. The Treasury takes on the responsibility.

MelG69

Sorry to sound so ignorant, but what is FOS protection?

dunstonh

FOS = Financial Ombudsman Service.

With NS&I as they are not regulated by the FSA you cannot take any complaint you have with the NS&I to the FOS. With a bank, if you dont think the response to your complaint is satisfactory you can go to the ombudsman. With NS&I you cannot.

Jonbvn

Why would you invest in these income bonds? They pay quite low interest and they are taxable.

nicko33

dunstonh wrote: »

With NS&I as they are not regulated by the FSA you cannot take any complaint you have with the NS&I to the FOS.

that's not what NS&I say
http://www.nsandi.com/pdf/complaints_procedure.pdf

dunstonh

Thanks for that. I wasnt aware that they now offered it as an option now. They are still not regulated by the FSA though and the treasury backs them up financially to 100% and you can still complain to your MP about them.

KeithEssex_2

Jonbvn wrote: »

Why would you invest in these income bonds? They pay quite low interest and they are taxable.

Still better than HSBC Flexible Saver !!! That only pays a top rate of 3.25% AER on balances over £50,000. The NS&I Income Bonds are almost instant access and 100% secure so you don't have to parcel up money into chunks of £35,000.

Yes you can certainly get better rates - all depends on whether you embrace the Internet (some elderly are not at all comfortable with this) and also how long you want to tie your money up for.

MelG69

Many thanks to all of you for your responses - very helpful! To be honest I am only putting this money in a savings account for a short while (6 months), it is instant access, I get monthly interest payable into another bank account, it seems to be relatively safe, and I don't have to mess around splitting it up into £35,000 parcels and open 5 different savings accounts! All in all it just seemed like the simply option and the interest rate isn't too bad. Thanks again!