Ns & I - Geb

marklar_2

Hi everyone, I have inherited a small amount of money and as I have been so bad at saving in the past I'm looking to make a sensible decision!
I have £2000 to save. Am I better off putting it in this (I don't mind not being able to get at it for 5 yrs);
http://www.nsandi.com/products/geb/index.jsp
Or just a high paying ISA?

many thanks for the anticipated advice

ManAtHome

I'd go for a high-paying ISA - most NS&I products now available are crap (broon-troosers needs your cash cheap), plenty of cash ISAs paying over 6% tax-free at the mo. GEBs are generally bad value - you do get a "no lose" guarantee, but lose the dividends from the shares and only get a percentage (80% ish?) of any capital gains (NSandI site is paint-dryingly slow...).

But that's me - "your mileage may vary" as they say - what tax-rate are you on and/or likely to be over the next few years.?

dunstonh

Its a rubbish GEB (like most retail GEBs). The terms are not at all attractive.

Mikeyorks

The GEB is a gamble. And the NS&I one is a relatively unattractive gamble .... as it caps your potential gain to 70%. As this has been as high as 125% .... and with the FTSE looking (?) to stay above the 6000 mark currently ..... I wouldn't take it.

Go for the ISA if you pay tax (or will be in the next few years) ..... or look at a fixed rate deposit (around 6.8% minimum) for 12 months otherwise.