NS&I's 'pensioner bonds' continue to top savings tables

10 February 2015

The National Savings & Investments 65+ Guaranteed Growth Bonds will be on sale until 15 May, chancellor George Osborne announced on Sunday. Originally the bonds were due to close once savers had put £10 billion in, sparking fears some might miss out.

So far 610,000 pensioners have bought the bonds, putting in £7.5 billion in just three weeks. The Treasury now expects the total amount in the bonds to top £15 billion.

The bonds pay 2.8% before tax (2.24 after tax) fixed for one year or 4% (3.2%) for three years. They are only available to those age 65 or over. You can put a maximum £10,000 into each bond - a total of £20,000 split evenly between them.

Find the best cash Isa or savings account for you

Higher rates

The rates are far higher than you can earn from banks and building societies, where the top rate for one year is 1.76% (1.41%) with the tiny National Counties Building Society or 2.4% (1.92%) for three years from Close Brothers. The best deal for two years comes from Harrods Bank at 2.25% (1.8%).

On easy-access accounts you can earn a top 1.41% (1.13%) with National Counties Online Saver 3.

The top fixed-rate deal on tax-free cash Isas for one year comes from Virgin Money at 1.7% while Post Office pays 1.95% for two years. On easy-access accounts you earn 1.5% including a bonus for the first 18 months with Post Office Premier Isa.

National Savings & Investments also pays 1.5% - with no bonus - but you can't transfer your existing cash Isas into this account. Barclays pays 1.49% on a minimum £30,000 with no bonus, and accepts transfers.

This article was written for our sister website Money Observer

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