National Savings Certificates could be an option if you want somewhere safe for your money. They are backed by HM Treasury and therefore guarantee absolute security for your cash. There is a range of different types of products depending on whether you want income or capital growth, and whether you are a taxpayer or not. It includes index-linked and fixed-interest certificates, savings bonds, income bonds and premium bonds.
All National Savings products guarantee that you can always get back at least the money you paid in and any interest that has built up. This makes them ideal for savings that you do not want to take any risks with and they could form the safe core part of your investment strategy if you are planning to diversify and spread your money around products that have different levels of risk.
Consider the following when deciding to purchase.
Interest rates will often be lower than other types of savings accounts available from banks and building societies. Nor do NS certificates give instant access to cash. Some products require you to give a month's notice if you want to withdraw your cash - or you pay a penalty in lost interest. To get the maximum benefit you may need to leave your money in the account for several years.
Holding a large sum in Premium Bonds means that with time the value of your investment will gradually be eroded by inflation; - unless of course you have regular or major wins!
National Savings are easy to buy and simple to understand and further information is available from the NSI web site (
www.nsandi.com)and from Post Offices.
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