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Children's Bonds

For their future

Invest for your children today and see them enjoy tax-free benefits tomorrow

Children's Bonds: facts and figures

  • Rate 2.50% tax-free/AER Issue 35
  • Term 5 years
  • Tax Tax-free

Suitable for savers who:

  • want a long-term, tax-free investment for their child’s future
  • want to know exactly what return their child will get
  • can leave the investment for five years at a time
  • have £25 or more to invest

Not for savers who:

  • want to invest for a young person over 16
  • want an account that their child can control
  • think their child might need access to the money early
  • are not the child’s parent, guardian or (great) grandparent

Investing in Children’s Bonds

Summary box: key product information

Account name

NS&I Children's Bonds

Interest rates

Fixed for set terms

Tax status

Tax-free for parent and child

Conditions for bonus payment

Not applicable

Withdrawal arrangements

Can be cashed in early with a penalty equivalent to 90 days’ interest

Access

Apply and cash in online, by phone or by post

Definitions

Tax-free  means that the interest is exempt from UK Income Tax and Capital Gains Tax.

AER (Annual Equivalent Rate)  is a notional rate that illustrates what the annual rate of interest would be if the interest was compounded each time it was paid. Where interest is paid annually, the quoted rate and AER are the same.

  • Our Children's Bonds

    Children’s Bonds make great gifts – either for your own child or for your (great) grandchild. Start a long-term investment that grows as the child does, with tax-free, guaranteed interest.

    Parents, legal guardians and (great) grandparents can invest on behalf of their child or grandchild aged under 16.

    Invest from £25 up to £3,000 per Issue for each child.

  • Who looks after the Bond?

    Until the child’s 16th birthday the parent or guardian nominated on the application looks after the Bond – regardless of who bought it.

    We’ll send the investment record, statements and all correspondence to the nominated parent or guardian until the child is 16.

  • Interest and tax

    The Bond will earn a fixed rate, guaranteed for five years at a time. Each time we change the rate on offer we release a new ‘Issue’ of Bonds.

    Check the rate for the current Issue.

    We calculate the interest on the daily balance, and add it to the Bond on each anniversary of investment. So the Bond grows in value each year and the child gets the benefit of compound interest.

    The interest earned is completely free of UK Income Tax and Capital Gains Tax for both the child and the parents.

    Children’s Bonds can be held in addition to Junior ISAs and they aren’t linked to the tax year.

    Find out more about tax and savings from HMRC

  • Ready to apply?

    Read the brochure with terms and conditions before you apply

    We last updated the terms and conditions on 22 April 2013

    Are you the child’s parent or guardian? You can apply now online, or by phone.

    Apply online

    Apply by phone

    Are you the child’s (great) grandparent? You can only apply by post.

    Print and complete an application form

    Living outside the UK?

    Find out what you need to do differently

Managing the Bond

Managing the Bond

While the child is under 16, only the nominated parent or guardian can manage the Bond. Once the child reaches 16, they will look after the Bond themselves.

The person who looks after the Bond can register for our online and phone service then log in or call us at any time to check the balance or cash in the Bond.

Or they can give us instructions by post.

On each anniversary we’ll send a statement to the person who looks after the Bond, showing the interest earned and the value of the Bond.

  • What happens at the end of a term?

    Around a month before the end of each 5-year term, we’ll write to the person who looks after the Bond to explain the options available at that time.

    Don’t forget to let us know of any change of address or contact details so we can get in touch.

    How do I change my address and other details?

  • Cashing in

    The person who looks after the Bond can cash in at the end of a 5-year term with no penalty.

    You can also cash in before that, but we will deduct a penalty from the payment equivalent to 90 days’ interest on the amount cashed in.

    When you cash in part of a Bond, at least £25 must remain in the Bond to keep it open.

    How to cash in

    Registered for our online and phone service? Log in or call us at any time with your NS&I number and password to hand.

    Log in

    Call us

    Or complete a cashing in form and send it to us.

    When you cash in online or by phone, we’ll send your payment within three working days. When you do this by post, we will send your payment within five working days.