National savings and investments

Contents
1. National Savings and Investments 2. What are 'National Savings and Investments'? 3. Types of NS&I savings 3.1. Tax-free savings schemes 3.2. Premium Bonds 3.3. Taxable savings schemes 4. Who can invest in National Savings? 5. Help in choosing a scheme 6. Opening an account

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:

• Your age
• How much you want to invest
• How long you want to invest for

The number of schemes available and their details change from time to time. You can get up-to-date information (like interest rate details) from NS&I by:

• Visiting their website
• Phoning them on 0845 964 5000, open 7.00 am to midnight, seven days a week (they'll send you brochures)
• Picking up a brochure from a post office

You don't pay tax on the interest from some NS&I savings schemes. At the moment, tax-free schemes include:

• Cash mini ISA – if you're aged 16 or over you can invest between £10 and £3,000 in each tax year
• Fixed Interest and Index-linked Savings Certificates – you can invest from £100 to £15,000 for two, three or five years if you're aged seven or over
• Children's Bonus Bonds – you can invest between £25 and £3,000 for five years for anyone under 16 and get guaranteed interest and a bonus

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:

• Income Bonds – pays monthly income that varies with changes in interest rates
• Fixed Rate Savings Bonds – pays interest at a rate fixed when you invest
• Pensioners Guaranteed Income Bonds – pays guaranteed monthly income for the term of the investment
• Capital Bonds – pays guaranteed rates of interest that rise each year over five years
• Savings accounts – quick and easy access to your money either instantly or after one month's notice

Many schemes are for a fixed term so you'll get less interest if you take the money out early.

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:

• Children's Bonus Bonds – can be bought for anyone under 16
• Pensioners Guaranteed Income Bonds – can be bought by anyone aged 60 or over

To invest in a Cash mini ISA you have to be a UK taxpayer.

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 NS&I website – which has an online 'help to decide' tool.

You can open an account or invest:

• In person – at post offices with a counter service
• Online – you can purchase some products and pay into them online, like Premium Bonds and Cash mini ISAs
• By post

You can ring the NS&I helpline on 0845 964 5000, from 7.00 am until midnight, seven days a week.