National Savings and Investments (NS&I) – Should You Invest? What should you look out for?

By | Last Updated: 17th September 2019 | This post may contain Affiliate Links

National Savings and Investments can also be simply known as NS&I. They’re backed by the HM Treasury and there’s a wide range of products which might be ideal for you.

Typically, they differ from other saving options as some products are ‘not always available’, some also have limited time offers, this means you need to keep an eye out for special deals and offers.

That’s where we come in, our team are frequently updating this section with the latest offers, so remember to ‘bookmark’ this page and check back on a regular basis!

What is an NS&I and how they work?

In basic terms, National Savings and Investments is a government department which offers investment products and savings to the general public. The type of products they offer vary and can change frequently. Normally they’ll include products such as:

  • ISAs
  • Income Bonds
  • Premium Bonds
  • Equity Bonds
  • Direct Saver Accounts
  • Growth Bonds and more!

Usually NS&I work in the following manner, when a person ‘invests or save’s they’re lending money to the UK government. Some people may ask ‘what if the country / government goes bankrupt?’, this is a good question to ask, however your money is secure and is guaranteed by Whitehall.

Some NS&I products may pay interest, stock market or inflation linked returns, this can be classed as an income. Some products may also give ‘tax-free’ returns such as Premium bonds. However, some NS&I products may enforce ‘early encashment penalties’, this means you might get less back than your original investment.

Typically, you’ll get all your money ‘back’, if not penalty has been enforced. You must think about whether this type of lending is a good idea for your circumstances. For some people, it can be a great way to ‘earn’ extra money on their savings, for others it may not be. You must remember that if inflation is high, your money might not hold its ‘value’ in real terms.

Of course, it’s recommended to seek an independent financial adviser, to figure out what returns you may get and if it’s correct for your situation.

How to Buy NS&I and Access

You can purchase NS&I products from the official NS&I Website or over the telephone. It’s important you read all terms and conditions before deciding which product is right for you. Some products allow you to have ‘instant access’ while others may not. Certificates and Bonds can ‘normally’ be cashed in early, but there’s typically a charge to be paid for doing this.

Instant access can include saving accounts to bonds and some saving certificates, however not all. As previously stated, it’s important you read the small print before committing.


Understanding Tax

It’s important to remember that some NS&I products will return money which is ‘free’ from capital gains and income tax, however it isn’t applicable to all products.

Usually ‘tax-free’ National Savings and Investments include:

  • Cash ISAs and Junior ISAs

  • Premium Bonds

  • Fixed Interest and Index-Linked Saving Certificates

Normally Guaranteed Growth Bonds and Guaranteed Income Bonds will pay returns with a ‘basic rate income tax’ deducted at the source. As of 2018, this is 20%. Remember it’s important to ‘declare’ any income you have earned to HMRC, you must pay any tax you owe, otherwise you could find yourself in trouble.

In addition to this, you should beware that tax can change in the future, the current rates may not remain ‘static’, and can rise as well as decrease.

Frequently Asked Questions

Can I invest in NS&I by Bank Transfer?
In most cases the answer is ‘yes’. Typically, you’ll have to give the details to your bank and inform them how much you would like to transfer and on what date. This can be done in branch, over the phone or through online banking. From this, the NS&I will ‘update’ your account once they have received the money.

You can invest in most products using this method, including ISAs, direct saver accounts, investment accounts, premium bonds and more. Please be aware that some products may require a minimum amount to be deposited.

For example, as of 2018, a Premium Bond needs an investment of at least £50 when ordering by a bank transfer or standing order. You should also note that any ‘transfers’ which would take you over the £50,000 premium bond limit will be automatically rejected, thus you should check your bonds balance before starting any transfer.

Who is eligible for National Savings and Investments?
This normally ‘depends’ on the product in which you’re interested in purchasing. Normally it’s open to people over the age of 16. You must be purchasing in your own name and if transferring money via the bank, have a UK bank account in your name.

Equally, if you live outside of the UK, you may be able to invest also. Generally, NS&I has always been a UK based savings provider, however some products can be purchased to non-UK nationals. This will vary though, as local restrictions can be applicable and liable for local tax. You’ll need to contact the NS and I department directly to discuss the matter further.

What happens if an NS&I customer dies?
In this situation, the next of kin or estate beneficiary will need to contact the NS&I and ‘claim’ for the customers assets. In ‘most’ cases, interest can still be paid on the account until it’s closed.

Usually the beneficiary claim process is straight forward, and the agency can be helpful if you’re unsure. Please visit their official website for the correct claims form and the step by step guide.

If the customer was based outside of the United Kingdom, or the next of kin does, it can be a little more ‘complex’, it’s recommended to call the NS&I for further information.

How long does it take to receive a withdrawal payment?
This can ‘depend’ on which NS&I product you may have, how much you would like to withdraw and how you want the withdrawal to happen. In most cases you can simply withdraw either online, by the telephone or by post for withdrawals under £20,000.

If you plan to use the phone or online, the payment will generally reach your designated account by the ‘end’ of the first banking day after they’ve received your instruction. If you’ve withdrawn by post and they receive the instruction before 13:00, it will be processed on the next banking day. If it’s received after 13:00 or on a weekend / bank holiday, it will normally be processed the following working day.

For withdrawals by phone or online for amounts over £20,000, it will be processed the same day, if the instruction is received before 20:00. If the instruction is received after 20:00, the payment will be processed the following banking day. Usually it takes around two working days to reach your nominated account.

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