Perhaps best known for its Premium Bond accounts, the UK's National Savings & Investments (NS&I) organisation actually offers a wide-range of savings and investment options. Its Treasury backing makes this an attractive place for many consumers to house their savings. What kind of accounts does NS&I offer and how many can help consumers save tax-free?
Tax Free Savings with National Savings & Investments
Consumers can use a variety of NS&I accounts to potentially save up to £93,600 (based on account limits across all tax free products) without having to pay income tax on the interest that they earn. Tax free accounts include:
- An ISA
- Index-Linked Savings Certificates
- Fixed Interest Savings Certificates
- Premium Bonds
- Children's Bonus Bonds
Each of these products will allow the consumer to save up to a certain limit. If they opened all accounts and saved to the maximum limits then this would come to the £93,600 limit quoted earlier.
General Savings and Investments With NS&I
In addition to tax free products the organisation also offers a range of taxable accounts that may be useful for savers. These include:
- Guaranteed Equity Bonds
- Guaranteed Growth Bonds
- Guaranteed Income Bonds
- Income Bonds
- Investment and Savings Accounts
These accounts may give higher investment limits and all will be liable for tax if the consumer is a tax payer.
Things to Consider Before Saving or Investing with National Savings & Investments
NS&I accounts remain popular with many consumers due to their advantages. These include:
- A range of tax free savings/investment options.
- HM Treasury backing/100% capital guarantees.
- Attractive returns on investment with many products.
It is worthwhile looking at all options before choosing any savings or investment medium. In some cases, for example, these products may not suit all consumers because some may:
- Tie up cash for long periods with no access until the product comes to an end.
- Only allow early cash withdrawals with the payment of penalties in interest given.
- Not give the most competitive rates of return in the sector.
Saying that, the zero risk element is attractive to many, as is the tax free status of many of the accounts on offer.
Consumers looking to maximise their tax free allowances and options should remember that there are other options that can be used to do this which may be worth investigating before choosing where to place their savings. Bear in mind that ISAs, for example, are widely available and are not solely offered by NS&I. It may therefore be worth comparing rates across the sector as a whole before deciding on a provider.
Source: National Savings & Investments
Carol Finch - Carol Finch is the Topic Editor for Retirement Planning, Budgeting, E-Commerce & Technical/Business Writing on Suite101.
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