National Savings & Investments (NS&I) has announced it will once again sell fixed term investment bonds.
The organisation will resume the sale of one-year and three-year Guaranteed Growth bonds and Guaranteed Income bonds, which it stopped selling in 2009.
The minimum investment is £500, and the maximum is £1m.
The one-year Guaranteed Growth bond will pay an interest rate of 1.5 per cent gross, while the three-year bond will pay 2.20 per cent.
The one-year Guaranteed Income bond will pay an interest rate of 1.45 gross, and the three-year bond will pay 2.15 per cent gross.
This means the growth bonds pay a greater income than the income bonds.
The bonds are 100 per cent backed by the UK government.
Ian Ackerley, chief executive of NS&I, said: "We are really pleased to be able to bring Guaranteed Growth bonds and Guaranteed Income bonds back on sale, which is another boost to savers following rate increases to our variable rate products, including Premium Bonds, on 1 December.
“These issues of Guaranteed Growth bonds and Guaranteed Income bonds will also help those who want a one-year investment or who want to invest additional savings for three years."
Paul Stocks, financial services director at Dobson & Hodge in Doncaster, said these bonds are "potentially" interesting, as he always recommends investors have a cash buffer in their portfolio, and these bonds offer such a buffer.
david.thorpe@ft.com
