'Pensioner Bonds' savings accounts for over-65s go on sale

NS&I has launched its newly-named 65+ Guaranteed Growth Bonds.

NS&I has announced that its savings bonds for over-65s, dubbed 'pensioner bonds' but actually named 65+ Guaranteed Growth Bonds, are now available.

There are two bonds available: a one-year fixed rate paying 2.80% gross interest and a three-year paying 4%.

Both are market-leading rates, although you will have to pay tax on the interest, which is added annually.

You can save from £500 up to a maximum of £10,000 in each bond. You can save in both bonds yourself or in both jointly with someone else.

The bonds are only available to people aged 65 or over, although you don’t have to be a pensioner. If you’re saving jointly with someone else, both people need to be 65+.

As these are fixed rate bonds, you will need to lock your money away for one year and three years respectively.

If you cash them in early, you’ll pay a penalty equivalent to 90 days’ interest.

The bonds can now be applied for online at the NS&I website, or by phone (free from a landline) on 0500 500 000.

Experts predict they will sell out quickly so don't wait if you want to apply.

How they compare

For over-65s with a decent chunk of money the 65+ Guaranteed Growth Bonds can't be beaten by high street savings accounts, as this table shows.

Compare savings accounts