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National Savings Income Bonds: Earn Monthly at Minimal Risk

April 13, 2016

Who doesn’t want to spend their whole life with financial security? Everyone looks for a life which can lead them towards wealth and peace of mind, but there is no guarantee.  For this reason, the majority of people in the UK are very concerned about their savings. However, they are still hesitant to invest their savings in any random investment plans to earn a regular income.

If financial security is your prime concern, then you can invest your money in National Savings Income Bonds. If you can’t afford the risk of losing the capital money or the regular returns, then this is the right product to keep your savings secured. This doesn’t only minimize the risk, but also gives the opportunity to earn a regular income. In this type of bond, the bond issuer will pay you the interest monthly, which is calculated daily.

Why National Savings Bonds are secured?
This is the government backed bond, which is considered as the safest investment product due to the guaranteed returns. However, this amount may vary with inflation, but will be transferred into the investors’ account on a fixed date of every month by the UK government. Overall your money is one hundred percent safe. You can also withdraw a portion or the complete capital amount anytime for financial emergencies, without any notice. The government will not charge you a penalty on the withdrawal.

Taxable or Tax-free?
These types of bonds are categorized into two - taxable and non-taxable. Premium Bonds, ISAs, Children's Bonus Bonds, and savings certificates are free from tax. You don’t need to pay any tax on the interest or prizes, you earn on the investment in this type of bond product. On the other side, Guaranteed Income Bonds and Guaranteed Growth Bonds are the taxable bonds, which deduct the tax on the interest amount earned. You will need to decide which can benefit you best in terms of financial growth.

Alternative Solutions to keep your Money Safe:
If you are not satisfied with the variable interest rates of NS&I products, then you can go for the Fixed-rate Bonds for earning fixed interest every month on your capital investment. However, to take the benefit of this fixed rate, you will have to lock your money for at least one year in this bond.

 

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