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Media centre /
Press releaseNS&I MAKES CHANGES TO FIXED RATE PRODUCT PORTFOLIO16 January 2008NS&I is to launch two new fixed rate Bonds on 23 February 2008. The two new Bonds, Guaranteed Income Bonds and Guaranteed Growth Bonds, will replace NS&I’s Fixed Rate Savings Bond, providing a clearer, simpler choice for customers. Whilst the Fixed Rate Savings Bond, introduced in 1999, had popular appeal, some people found it complex. The new products are simpler to understand, whilst retaining flexibility of choice. Both the new products will offer customers the opportunity to invest between £500 and £1 million in a fixed rate bond with guaranteed rates of interest for either one, three or five year terms. The Guaranteed Income Bond offers customers the opportunity to receive their interest as a monthly income whilst with the Guaranteed Growth Bond customers will receive their interest at the end of their chosen investment term. Fixed Rate Savings Bonds will be withdrawn from sale to new customers from 23 February 2008. In addition, NS&I will cease new sales of its Pensioners Guaranteed Income Bonds, opened in 1996, and its Capital Bonds, opened in 1989, from 23 February 2008. The new Guaranteed Income Bonds and Guaranteed Growth Bonds offer similar benefits to these products but in simpler and more straightforward formats. These changes will only affect new customers and customers whose Bonds are about to mature. Customers with maturing investments in Pensioners Guaranteed Income Bonds, Capital Bonds or Fixed Rate Savings Bonds will be offered the option of transferring to the new Bonds when their current investments mature. The last of these Bonds will mature in February 2013. Peter Cornish, NS&I’s Director of Customer Offer, said, “I want to reassure customers that we will write to them when they need to take action, to explain the options available to them and to help them through the change.” NS&I will be writing to all current investors in Pensioners Guaranteed Income Bonds and Capital Bonds six weeks before the Bonds are removed from sale, six weeks prior to their investments maturing, and then again two weeks before their Bond matures, to explain the options available to them and to make the reinvestment process as simple as possible. Customers can reinvest in one of the new bonds or, if they prefer, any other product from NS&I’s range - or simply cash in their investment. As the new Bonds are paid net of tax, non-taxpaying customers will need to reclaim tax paid and this will be explained clearly. The change to its product portfolio reflects NS&I’s new five-year strategy of simplification and modernisation1 and this review is the next step, designed to reduce product duplication and to simplify NS&I’s offering. Peter Cornish, continues, “Our aim is to help people choose the right savings plan for their needs and to reduce the complexity which we know is often involved in making such decisions. There was a lot of duplication across the Fixed Rate Savings Bonds, Pensioners Guaranteed Income Bonds and Capital Bonds, making it complicated for people to decide which was the best for them. Replacing some of these products with two easy-to-understand bonds means people can work out what is best for them more easily.” Ends Notes to Editors 1. NS&I’s ‘Adding Value’ strategy (2007-12) is designed to deliver long-term value to stakeholders and customers by simplifying, modernising and diversifying the business, in line with our values which encompass security, straightforwardness and integrity, delivered with a human touch. A copy of our 2006/07 annual report that summarises the strategy can be obtained here. http://www.nsandi.com/pdf/annual07_report.pdf 2. The Guaranteed Income Bond and the Guaranteed Growth Bond can be opened by post or over the phone on 0845 964 5000*. They offer fixed investment terms of 1, 3 and 5 years. A 90 day interest penalty is applied to early withdrawals. Bonds can be opened with a minimum initial investment of £500 and allow a maximum investment of £1 million. 3. NS&I is an Executive Agency of the Chancellor of the Exchequer.
Media team The numbers below are for media use only. Customers wishing to contact NS&I can find details here.
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