Guaranteed Income Bonds - Invest now

26 October 2009

Description

1. National Savings and Investments (formerly known as National Savings) Guaranteed Income Bonds (“Bonds”) are a UK Government security issued under the National Loans Act 1968. Bonds are registered on the National Savings Stock Register and are subject to The National Savings Stock Register Regulations 1976 (Statutory Instrument Number: 1976/2012) as amended or re-enacted from time to time (see paragraph 37). In the event of any differences between these terms and conditions and the Regulations, the Regulations will prevail. Copies of UK legislation can be purchased from the TSO Parliamentary and Legal Bookshop.

Definitions

2. In these terms and conditions:
(a) “BACS” means the Bankers’ Automated Clearing Service;
(b) “banking day” means a day (other than a Saturday, Sunday or bank holiday) on which banks are generally open for business in London, and, in relation to the processing of a payment, any other place of receipt;
(c) “Director” means the Director of Savings;
(d) “NS&I” means National Savings and Investments operating through its Durham office or such other office as the Director may specify;
(e) “post office” means a branch of Post Office Ltd in the UK.

Interest and UK Income Tax

3. Bonds earn interest at rates fixed for a specified period of time (eg 1 year, 3 years etc) starting from the date of investment. We call each period of time a term. Each term will have its own Issue of Bonds issued in sequence (eg 1, 2, 3, etc) and different interest rates may apply to each Issue of each term. There may be more than one term available at any time.

4. Some Issues may be exclusively available through certain sales channels (eg telephone and internet).

5. Each term available and the interest rates that apply to each Issue will be published in the London, Edinburgh and Belfast Gazettes. For details of the current Bonds on offer please see our Interest Rates leaflet available at post offices and from NS&I, and also on our website at www.nsandi.com. Any Issue of Bonds can be withdrawn from sale without notice. An application can only be accepted for the Issue on sale on the date of investment (see paragraph 17) and the interest rate earned will be that which applies to that Issue.

6. Subject to paragraphs 24 and 36 interest is earned for each day your Bond is held based on the value of your Bond at the end of that day. This includes the date of investment but not the date you cash in your Bond. Interest is earned on a daily basis at 1/365 of the annual interest rate for each day (or 1/366 for each day in a calendar leap year).

7. Interest is paid monthly by direct credit to a bank or building society account on the same date each month as the date of investment (eg if the date of investment is the 10th of a month the interest will be paid on the 10th of each subsequent month) until the Bond is cashed in. The Director intends to use BACS for this purpose so the account nominated on the application must be capable of receiving payment by this method.

8. If the due date for payment of interest falls on a day which is not a banking day, your account will not be credited with interest until the next banking day. If the due date for payment of interest falls on a day which does not apply for the month (eg if the due date is 31st of the month and there are only 30 days in the month of payment) your account will be credited on the last day of that month.

9. UK Income Tax at the rate prescribed by law will be taken off the interest before it is paid to your account. A certificate of tax deduction will be sent to you shortly after the end of each tax year at your last recorded address for the Bond.

Who may invest in Bonds

10. Individuals aged 16 years or over. You may invest in Bonds:
(a) in your own name; or
(b) jointly with one other individual who is also aged 16 years or over.
You may hold more than one Bond in either or both of these categories.

11. Trustees. You may invest in Bonds as a trustee either solely or jointly with one or more other trustees. Corporate trustees may also invest in Bonds. The Trust may have up to two beneficiaries (but a beneficiary whose interest only takes effect on the death of another beneficiary is disregarded for the purpose of this limit). Beneficiaries must be individual persons and can be of any age.

12. Deputies. If you are a deputy with the power to make investments on behalf of a person who lacks capacity (or if you are a person duly authorised in that behalf), you may invest in a Bond on behalf of and in the name of that person.

13. General. You may not invest in Bonds:
(a) if you are under 16 years of age;
(b) for the benefit of another individual, except as permitted by paragraphs 11 or 12;
(c) if you are under a legal disability, subject to paragraphs 10 to 12 inclusive.

How to invest

14. You may invest in a Bond by applying via the internet, by telephone or by post to NS&I (but see paragraph 4). Where you apply via the internet or by telephone and this is your first investment in Bonds, you must confirm your application by signing and returning a confirmation form we will send to you by post. The form will specify the time within which the signed form must be returned to NS&I. If the form is not received within the specified time the Director will not be able to process your application. We will let you know if this is the case.

15. Because Bonds of more than one term may be available at any one time, you must specify your choice of term when you apply.

Evidence of identity

16. In accepting the terms and conditions you are confirming that you, and anyone else named on the application, are aware that your and their identity and address will be checked as detailed in the Guaranteed Income Bonds brochure. We may also write to any person named on the application requesting documentary evidence of their identity and address. The letter requesting evidence of identity will specify the time within which the evidence must be returned to NS&I. If the evidence is not received at NS&I within the specified time the Director will not be able to process your application. We will let you know if this is the case.

Acceptance of applications

17. In all cases, an application to invest is subject to acceptance by the Director. If accepted, the date of investment will be:
(a) for applications sent by post, the date that NS&I received your application and payment;
(b) for applications via the internet, the date that NS&I received your online application and authority for a debit card payment in your name, subject to authorisation of the debit card payment from the card-issuer;
(c) for applications made by telephone, the date that NS&I took the details of your application and authority for a debit card payment in your name, subject to authorisation of the debit card payment from the card-issuer. Where a telephone application takes place over two dates in one continuous call, ie beginning before midnight and ending after midnight, the date that NS&I took the details of your application and authority for a debit card payment in your name will be the date that the call began.

18. We will send you a certificate of investment showing the value and date of investment.

Investment and holding limits

19. The minimum you can invest in a Bond is £500.

20. You may not invest in a Bond if immediately after that investment you would hold, whether solely or jointly with another person, more than £1,000,000 in Bonds (including any amount you hold in NS&I Guaranteed Growth Bonds and previous Issues of Fixed Rate Savings Bonds). The holding limit will not prevent the addition of interest but interest that has been added will count towards this limit if you wish to invest in a further Bond.

21. Bonds you inherit from a deceased holder will not count towards the maximum limit.

22. Bonds you hold as a trustee will not affect the amount you may hold for yourself, nor will Bonds held in trust for a beneficiary count towards the maximum limit of that beneficiary’s personal holding. Although the maximum limit applies to trust holdings, each trust is treated separately.

Cashing in

23. Bonds bought by cheque or debit card can only be cashed in after your payment has cleared. The time taken for payments to clear is detailed in the Guaranteed Income Bonds brochure. You can cash in a Bond at any time in accordance with paragraphs 24, 25 and 33. Bonds can be cashed in by completing the relevant form (available from NS&I) and sending it to NS&I with your certificate of investment. To cash in a Bond held jointly, all investors need to sign the form.

Penalty

24. Except where paragraph 25 applies, a penalty equivalent to 90 days interest on the sum requested, at the rate your Bond is earning on the day before the day you cash in, will be deducted from the amount to be cashed in. This penalty also applies to Bonds held for less than 90 days.

25. No penalty will be charged:
(a) if you cash in at the end of the term or at the end of any subsequent term (see paragraph 36) and your instructions are received by the end of that term;
(b) where an instruction to cash in is made after the death of a sole, or last surviving, registered holder;
(c) where the Bond is registered as held in trust and the instruction to cash in is made after the death of a sole, or last surviving, beneficiary.

Partial encashments

26. Part of a Bond may be cashed in under paragraphs 24, 25 and 33. There is no minimum limit for repayments but at least £500 must remain invested in the Bond. The Treasury may bring in a minimum limit upon giving written notice to Bond holders. A replacement certificate of investment, retaining the original date of investment, will be issued for the remaining balance.

27. It may be difficult to prevent an interest payment from being made after the last date on which interest is earned. If so any overpayment will be deducted instead from the amount to be cashed in.

28. The amount due when a Bond or part of a Bond is cashed in will be rounded to the nearest penny.

Payment

29. Payment will normally be made by direct credit to a bank or building society account you nominate on the instructions to cash in, which should be in the name of the Bond holder(s). The Director intends to use BACS for this purpose, but reserves the right to use a different means of electronic transfer.

30. For the purpose of determining the amount payable, the date a Bond or part of a Bond is cashed in will:
(a) where the Bond is cashed in at the end of the term, be taken to be that date regardless whether payment is delayed until the next banking day because the date falls on a non banking day;
(b) in any other case, be taken to be the date on which, in the normal course, the requested amount would be credited to the nominated account following initiation of the electronic transfer by the Director.
In the case of BACS, this is normally two banking days after the Director initiates the transfer.

31. Where the Director initiates an electronic transfer correctly, neither the Director nor the Treasury will be liable for:
(a) any failure or delay of the receiving bank or building society in crediting the nominated account;
(b) any failure or delay in any part of the electronic transfer process which is beyond the Director’s direct control;
including any failure which occurs because the specified account is incapable of receiving an electronic transfer.

32. In exceptional circumstances payment can, on request, and with the consent of the Director, be made by crossed warrant (like a cheque). In such cases the date a Bond or part of a Bond is cashed in will be taken to be the date on the warrant.

Joint investments

33. Where Bonds are held jointly by two or more holders:
(a) the investment will be the joint property of all holders;
(b) to give any instructions relating to the Bond all holders need to sign;
(c) in the event of death of a joint Bond holder full ownership of the Bond will pass to the survivor(s) who will be entitled to operate the Bond on the same terms;
(d) if a Bond holder tells us of a dispute, NS&I may freeze the Bond until we receive written instructions from all holders. At the request of any holder we may suspend interest payments to the account nominated on the application to invest. However, the Bond will continue to earn interest.

Transfers

34. You can only transfer your Bond or part of a Bond with the consent of the Director. The Director will, for example, normally give consent in the case of the inheritance of Bonds on the death of a holder but not to any transfer which is by way of sale.

35. The Director will not normally consent to a transfer:
(a) of less than £500 in Bonds;
(b) if the transferor(s) would as a result hold, whether solely or jointly, less than £500 in Bonds;
(c) if the transferee(s) would as a result hold, whether solely or jointly, more than £1,000,000 in Bonds (including any amount held in NS&I Guaranteed Growth Bonds and previous Issues of Fixed Rate Savings Bonds).

Retention after the fixed rate term

36. After the original term (or any further term for which interest is earned under this paragraph), a Bond may be eligible to earn interest for a further term of the same length. The Treasury will decide whether this will apply and, if so, what the interest rate will be. The Director will write to the holder, at the last recorded address for the Bond, shortly before the end of each term to tell them of the Treasury’s decision. If a Bond is eligible for a further term the rate of interest will be applied automatically and will be guaranteed for the whole of the further term, but the holder will remain free to cash in the Bond at any time (including for reinvestment into another Issue or another NS&I product) under the normal rules for cashing in as set out in paragraphs 24, 25 and 33.

Regulations

37. As at 1 October 2009, The National Savings Stock Register Regulations 1976 (Statutory Instrument Number 1976/2012) have been amended by the following Statutory Instruments:

Law and jurisdiction

38. These terms and conditions and any agreement made on the basis of them will be governed by and interpreted in accordance with English law.

39. In the event of the death of the holder of a Bond, the Director reserves the right to make any payment in respect of the Bond in accordance with the law of the place in which the Bond holder resided or, if different, was domiciled at the date of their death.

40. Subject to paragraphs 41 and 42, the courts of England are to have exclusive jurisdiction to settle any dispute (including claims for set off and counterclaims) which may arise in connection with these terms and conditions or any agreement made on the basis of them and which, subject to the Regulations, falls to be determined by a court of law.

41. Where section 16 of the Civil Jurisdiction and Judgments Act 1982 applies the relevant court of law of the relevant part of the United Kingdom shall have jurisdiction to settle any such dispute.

42. Paragraphs 40 and 41 are included for the benefit of NS&I. Accordingly NS&I retains the right to bring proceedings in any other court which has jurisdiction to whose jurisdiction the holder irrevocably submits.

Guaranteed Income Bonds
National Savings and Investments
GLASGOW
G58 1SB

26 October 2009
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