How does this affect you?
NS&I continues the overhaul of its accounts with new terms and conditions on Savings Certificates and Guaranteed Bonds from 20th September.
The changes will affect new issues of the following savings from that date:
- Guaranteed Growth Bonds
- Guaranteed Income bonds
- Index-Linked Savings Certificates
- Fixed Interest Savings Certificates
- Children’s Bonds
Current issues are not affected by the changes. Customers buying any of the above after 20th September, or rolling over maturing investments, will be subject to the new rules. For now, only the Children’s Bond range is open to new investors.
The changes affect terms and conditions, along with who can buy the products or access their accounts online or by phone. The biggest change is to early redemption penalties.
Guaranteed Growth Bonds and Guaranteed Income Bonds already charge 90 days interest for early redemptions. They will be joined by any new issues of Index-Linked Savings Certificates, Fixed Interest Savings Certificates and Children’s Bonds offered after 20th September.
Index-Linked Certificates issued after September will also lose a year’s worth of index linking on top of the 90 days for early redemption. New Children’s Bonds will lose the ‘bonus’ interest feature of current issues on early redemption.
All new Children’s Bonds will come with just a flat rate of interest. And new Index-Linked and Fixed Interest Savings Certificates will no longer escalate year by year as current issues do.
The good news is that Guaranteed Bonds, Certificates and Children’s Bonds will move online, allowing investors to see transactions and electronic statements.
The bad news, as we have mentioned before, is that NS&I is continuing its withdrawal from Post Offices. Grandparents and other relations will only be able to buy Children’s Bonds by post, phone or online.
Confused? We’re not surprised. But don’t worry. NS&I will write to you 30 days before any existing bonds and certificates mature with full details of the changes to new issues. You don’t have to roll over if you don’t want to - and you’ll have a month to peruse SavingsChampion to see if you can get a better deal!
If you can’t wait, here are the links to the NS&I website, detailing changes for each product.