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Changes - We're changing Children's Bonus Bonds

We’re changing Children’s Bonus Bonds

Children’s Bonus Bonds will start changing on 20 September 2012.

What’s new?
Here is a summary of what’s changing.

Financial changes

  • penalty for cashing in early
    The penalty is equivalent to 90 days’ interest on the amount cashed in.

  • single annual rate of interest for each Issue (no bonus)
    We’ll make up the overall compound return by paying a higher guaranteed rate of interest for five years, but with no bonus at the end (previously we paid a lower annual rate plus a bonus at the end of each 5-year term).

New name

  • they’ll be called Children’s Bonds instead of Children’s Bonus Bonds
    This is to reflect the change to how we’re paying interest (see above).

Looking after your child’s investment

  • annual statements to help you keep track
    Shortly after each anniversary date, we’ll send a statement to the person who looks after the Bond, showing its value and how much interest has been earned.

  • new online and phone service
    As a parent or guardian looking after your child’s Bond, this gives you a secure and convenient way to keep track of your and your child’s money with NS&I and keep your details up to date.

Rules for investors

  • Bonds can no longer be held until the child’s 21st birthday
    Each Bond will now finally mature once it reaches its first 5-year anniversary on or after the child’s 16th birthday.

  • only parents, guardians and (great) grandparents can invest
    If you’re not related to the child in this way, you won’t be able to buy new Bonds for them.

  • no longer sold in units of £25
    The minimum for each investment is still £25, but larger investments can be for any amount up to a total of £3,000 per child per Issue.

If your child has a Children’s Bonus Bond, don’t worry. The changes will only affect their Bond if it matures on or after 20 September 2012, and you choose to renew it for a further term. So you don’t need to do anything yet.

We’ll write to you around 30 days before your child’s Bond matures, to remind you that it’s time to decide what to do with the money. We’ll include full details of the changes, together with information explaining your choices for renewing or cashing in. If your child will be 16 or over on the maturity date, we’ll write directly to them as they will be responsible for the Bond.