National Savings and Investments (NS&I) offers a totally safe way of saving and investing money because it's backed by HM Treasury. Some schemes pay interest that is taxable while others have the benefit of being tax-free. Premium Bonds don't pay interest but you can win tax-free prizes.
Anything you save with NS&I is secure because you're lending money to the government, which guarantees to repay it.
There are some 'easy access' schemes available which let you take your money out whenever you want. But most NS&I schemes are long-term investments where your money is invested for between one and five years.
At the moment there are about a dozen different types of savings scheme to choose from depending on:
You don't pay tax on the interest from some NS&I savings schemes. At the moment, tax-free schemes include:
If you buy Premium Bonds you won't get interest but you can win tax-free prizes. You get a unique number for each £1 that you invest and if these numbers are selected in the monthly draw you will win a prize.
Prizes range from £50 to £1m. You've got to be 16 or over to buy Premium Bonds, although parents and grandparents can buy them on behalf of children under 16. The minimum purchase is £100 (£50 when you buy by monthly standing order) and the most you can hold is £30,000.
You've got to pay tax on the interest from some NS&I savings schemes. Mostly, the interest is paid without tax being deducted. So if you're not a taxpayer the full amount of the interest is added to your savings. You don't have to fill in an Inland Revenue form or claim the tax back.
There are several taxable savings schemes, like:
There are different age limits for investing in each of the savings schemes – usually starting at age seven or 16. Some schemes are available only for certain age groups:
The NS&I helpline will explain their savings schemes to help you decide which is best for you. You can get full details about each scheme by asking for a brochure or visiting the– which has an online 'help to decide' tool.
You can open an account or invest: