Where cash can be held – NS&I

Question 1

What are the main features of NS&I accounts?

Answer 1

NS&I are government backed and effectively are a form of government borrowing, used to raise finance for government spending requirements. Their appeal lies in
the fact that the government backing makes them very secure investments. As a result of this security, the returns are not always the highest.

Question 2

Describe the basics of a NS&I Direct ISA (Tax Free)

Answer 2

This is a cash ISA with a minimum subscription of just £1. Only available online or on the phone. Interest is variable and tax-free.£20,000 allowance

Question 3

Describe the basics of a NS&I Junior ISA (Tax Free)

Answer 3

Up to £9,000 may be contributed to a Junior ISA on behalf of a minor in 2023/24 with a minimum contribution of £1 accepted.

Question 4

Describe the basics of a NS&I Certificates (Tax Free)

Answer 4

These are not currently on sale but are available for maturing certificates of all or part of the maturing balance can be renewed. They are a form of tax-free
investment, offered in two forms:

Fixed interest – lump sum investments, paying interest over a fixed term. Where the investment is held to the full term it withdrawals can be made with no penalty. Before this point a penalty of 90 days’
interest will be charged.

Index linked – offer a rate of return linked to
inflation (RPI for certificates renewed before 01/05/19 or CPI for ones renewed after the 01/05/19) and so guarantee a return in ‘real terms’. Interest is accrued for each month the certificate is held though and
again a penalty of 90 days’ interest is charged on withdrawals before the term is completed.

Question 5

Describe the basics of a NS&I Guaranteed Growth Bonds (Paid gross but taxable)

Answer 5

(Paid gross but taxable)
not currently on sale but when they are available they pay a guaranteed fixed return on holdings over a choice of terms. The minimum investment is £500 and the maximum is £10,000 per person per issue.
Interest is paid gross but is taxable and needs to be declared on the investor’s tax return.
From 01/05/19 no access is permitted until the end of the term.
When available, anyone over 16 can have one either individually or jointly with another person. These are only available for maturing policies.

Question 6

Describe the basics of a NS&I Income Bonds (Paid Gross but taxable)

Answer 6

Pay a regular variable rate of monthly interest.
Anyone over the age of 16 can have one. They can be held by trustees for someone else.
Minimum investment £500, maximum £1m sole or £2m joint.
Regarded as ‘easy access’, withdrawals can be made with no notice and no penalty. Interest is paid gross but is taxable in full.

Question 7

Describe the basics of Green Savings Bonds (Paid Gross but taxable)

Answer 7

An online savings bond for individuals aged 16 or over.
Pays a fixed interest over a three year term

Question 8

What are 2 different types of account offered by NS&I?

Answer 8

NS&I Bank accounts (Paid Gross but taxable)

Investment Accounts – min investment £20, max £1m sole or £2m joint. No notice for withdrawals. Interest paid gross but taxable in full. Postal only.

Direct Saver Account – internet or phone only. Min £1, Max £2m sole or £4m joint. Interest paid gross but taxable in full.

Question 9

An easy way to remember the NS&I tax-free
products, think PICK!

Answer 9

► Premium Bonds
► ISA
► Certificates
► Kids (Junior) ISA