New Investment Bond
It was announced as part of the last autumn statement that a new National Savings and Investments (NS&I) product called the NS&I Investment Bond will be launched. It has now been confirmed that the product will be available for 12 months from April 2017 for a 3-year fixed term. The new Investment Bond offers a reasonable rate for savers who have been hard hit by low savings rates for a number of years.
The bond will offer a fixed interest rate of 2.2% and is open to those aged 16 and over, subject to a minimum investment limit of £100 and a maximum investment limit of £3,000 per person. It is expected that around 2 million people will benefit from the new bond. Whilst most savers will not be liable to tax on the interest, the interest will be taxable for those not eligible for the Personal Savings Allowance.
If the money invested is required before the fixed term has expired there will be an interest penalty equal to 90 days interest on the amount cashed in.