How to Invest in NS&I
National Savings and Investments (NS&I), based out of the United Kingdom, dates back to 1861. In 1956, NS&I bonds were established to reduce inflation. The primary benefit to investors of NS&I investments was to earn money, not by earning interest, but by winning a lottery. This is the main draw for most bond investors today as the interest rate on NS&I bond products is set relatively low compared with other fixed-income securities. However, not all NS&I investments are entered into the lottery. This article will show you which NS&I investments qualify for the lottery and how to purchase NS&I investments via the Internet or by phone.
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Instructions
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How to Invest in NS&I
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1
Decide on what you want to invest in. NS&I offers a wide range of investing options that fill a suite of needs. All investments are backed by Her Majesty's Treasury, which is the United Kingdom's economic and finance ministry. This is equivalent to the U.S. Treasury, so the risk associated with investing in NS&I is limited. Investment options include tax-free investments, guaranteed returns, high potential returns or monthly income (see Tips).
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2
Review the interest rates for the product that best fits your needs. These investments are identical to the type of bond investments you can select at any major U.S.-based financial institution. Similar to U.S. fixed-income products, the rates are dynamic so you will need to review published rates prior to making a purchase. Rates are published on all variable rate and fixed interest rate products as outlined in Step 1 (See Resources).
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3
Decide on an amount to invest. The minimum for each investment is 100 Great British Pounds (GBP); the maximum is 30,000 GBP. Increments are in 100 GBP lots so you can make a purchase in NS&I for 200 GBP, 300 GBP, 400 GBP and so on up to 30,000 GBP. For reference, as of May 26, 2009, 100 GBP is equivalent to $158.16 (USD) and 30,000 GBP is equivalent to $47,447.91.
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4
Purchase NS&I investments online. Click on "Invest Now" at the bottom of the "Interest Rates" web page. You will need a valid email address and a debit card (no credit cards are accepted). You will also need to fill out a form and return it within 21 days for proof of identity and address. Also be sure to review the terms and conditions (T&C's) on the investment. When finished reviewing T&Cs, click on "I Accept" at the bottom of the page and proceed with filling out the form to purchase NS&I investments directly online.
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5
Purchase NS&I Investments by phone (see Resources). They will walk you through the terms and conditions for all NS&I investment products. The same requirements pertain to purchasing NS&I investment products over the phone as they do online (see Tips).
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Tips & Warnings
You can choose from Premium Bonds (lottery and tax free products), Direct ISA (tax-free), Easy Access Savings Accounts (taxable, paid gross), Income Bonds (taxable, paid gross), Investment Accounts (taxable, paid gross), Fixed Interest Savings Certificates (tax-free), Index-linked Savings certificates (tax-free), Guaranteed Growth Bonds (taxable, paid net), Guaranteed Income Bonds (taxable, paid net) and Children's Bonus Bonds (tax-free). Note, the only investment in NS&I that is eligible for entry into the lottery are Premium Bonds. When calling internationally, outside of the U.S. or Canada, you must dial a 011 first. To purchase NS&I bonds you will need to call 011 (+44) 20 500 007 007. 011 is the international prefix used to dial somewhere outside of U.S. 44 is the international code used to dial to U.K. 20 is the local area or city code used to dial to London.
This is not to be construed as legal or investment advice.
