Much attention has been focused on the upcoming rate cuts to NS&I on-sale accounts – but for those with existing Fixed Term Products, changes are coming for them too.
New Issues of the Guaranteed Income Bonds, Guaranteed Growth Bonds and Fixed Interest Certificates are being introduced from 24th November – at vastly reduced rates compared to the previous issues. And if you have a Bond that is maturing around now, make sure you know the rate of interest that you will be getting if you roll over.
NS&I states;
If you have one of our fixed term investments that is about to mature, we’ll contact you around a month before the maturity date to let you know your options and the current renewal rates.
If you choose to renew your investment for another term of the same length, you’ll receive the rate we quote in your letter, even if our rates go down before your maturity date. If you renew for a different term, you’ll receive the rate on offer on the date your investment matures. Bear in mind that this could be lower than the rate in the summary box we send you.
The key point here is that if you decide to roll over, but for a different term to the one your maturing bond was invested for, if your bond matures on or after 24th November, you will get the new rates which are as follows;
Guaranteed Growth Bond (1-year) Issue 67 – 0.10% gross/AER (previous issue 66 was paying 1.10% gross/AER)
Guaranteed Income Bond (1-year) Issue 67 – 0.06% gross/AER (previous issue 66 was paying 1.05% gross/1.06% AER)
Guaranteed Growth Bond (2-year) Issue 59 – 0.15% gross/AER (previous issue 58 was paying 1.20% gross/AER)
Guaranteed Income Bond (2-year) Issue 59 – 0.11% gross/AER (previous issue 58 was paying 1.15% gross/1.16% AER)
Guaranteed Growth Bond (3-year) Issue 62 – 0.40% gross/AER (previous issue 61 was paying 1.30% gross/AER)
Guaranteed Income Bond (3-year) Issue 62 – 0.36% gross/AER (previous issue 61 was paying 1.25% gross/1.26% AER)
Guaranteed Growth Bond (5-year) Issue 55 – 0.55% gross/AER (previous issue 54 was paying 1.65% gross/AER)
Guaranteed Income Bond (5-year) Issue 55 – 0.51% gross/AER (previous issue 54 was paying 1.60% gross/1.61% AER)
Fixed Interest Certificates (2-year) Issue 57 – 0.10% tax free/AER (previous issue 56 was paying 1.15% tax free/AER)
Fixed Interest Certificates (5-year) Issue 107 – 0.50% tax free/AER (previous issue 106 was paying 1.60% tax free/AER)
The bottom line is that you’ll need to tread carefully when trying to decide whether to roll over a maturing fixed term product with NS&I.
If you qualify for the current issues that were launched in May this year, then you could earn a very competitive rate if you roll over for exactly the same term. BUT tread carefully – especially if you opt to change the term to roll over for, as you could find yourself earning far less than you thought.
Read the paperwork carefully!
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