NS&I launches new market-leading investment bond with rate of 2.2 per cent

But the NS&I bond is only available online which will put it out of the reach of many pensioners who count on the returns of their savings to supplement fixed income pensions.

Financial experts also pointed out that its rate is below the Consumer Price Index (CPI) rate of inflation at 2.3 per cent.

Anna Bowes, director at Savingschampion.co.uk, said many savers may be particularly disappointed that NS&I “which once offered its products via the Post Office network, is now firmly moving with the times and restricting this account to internet users only”.

She added: “This could cut off access for those savers most in need of improved rates, including elderly pensioners who do not wish to use the internet.”

Research from the price comparison website has found that around a quarter of all live fixed-rate bonds are now online only.

And announcing the launch, the Treasury said the online-only availability of the bond reflects the changing nature of customer behaviour as more money is deposited online with NS&I than via any other individual sales channels.

The new Investment Guaranteed Growth Bonds are for customers aged 16 or over. 

Savers can put between £100 and £3,000 into the deal and the 2.2 per cent rate is fixed for three years. 

The bond will be on sale at nsandi.com for the next 12 months.

Savers wanting to withdraw their money before the end of the three-year term face a penalty equal to 90 days’ interest on the amount cashed in.

Someone cashing their money in within 90 days of buying the bond will get back less than they invested.

NS&I, which also offers premium bonds, is backed by the Treasury, so money invested with it is 100% secure.

The provider, which previously offered popular pensioner bonds, has more than 25 million customers.

Savers have suffered paltry rates in recent years, with further cuts made following the Bank of England base rate falling to 0.25 per cent in 2016.

Economic Secretary to the Treasury Simon Kirby said: “From raising the Isa threshold to introducing the new Lifetime Isa, this government is committed to creating a nation of savers.

“With its market-leading rate of 2.2%, the investment bond will provide a valuable boost for savers who have been affected by low interest rates.”

Daily Express :: Personal Finance Feed

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