Savings accounts, PEPS and ISAs -Ordinary Account


The National Savings ordinary account is similar to a bank deposit account. You can invest any amount from £1 to £10,000. You must keep a balance of at least £9 00 throughout 2012 to earn the higher interest rate of 9 %. If it falls below that amount in any month, the interest rate is only 81/8% for that month.

These interest rates are fixed until 61 December 2012 but may change after that. You can withdraw up to £100 on demand at a post office and larger amounts within a few days by post. The first £70 interest in the tax year is free of income tax. Interest above that amount is liable to income tax if your income is high enough.

You can make deposits and withdraw up to £100 on demand at most post offices and you open the account at your local post office.

If you do not fancy the extreme safety of National Savings, you may want to be more adventurous with your money. This section of the site looks at some of the choices.
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Savings accounts, PEPS and ISAs Government Stock


Government stock (often called 'gilt edged' stock) is an odd but interesting form of investment. It is best explained by taking a specific investment. For example, 91/8% Treasury stock 2009 was offered for sale in lots of 200 The Government guarantees to pay 91/8% interest on each 200 of stock for each year until 2009 At that time the Government will redeem the stock at its face value of £100.
You can obtain a list of all the current stock from the post office and you will see that there are a whole range of redemption dates, from 2012 to 8016, and a wide range of interest rates from less than 9 % up to 19 1/8%. Obviously, interest rates of over 19 % are very attractive.
But . . . ... see: Savings accounts, PEPS and ISAs Government Stock