Last chance to grab pensioner bonds
Savers have just over a week left to snap up the market-leading pensioner bonds which pay up to 4% interest.
The deals, which went on sale on January 15, have already proved hugely popular, with £10 billion-worth of bonds being snapped up by 825,000 people in the first eight weeks they were launched.
Savers need to be aged 65 years old or over to take out the bonds, which are available through National Savings and Investments (NS&I) and will close for sale on Friday May 15.
Customers can buy the 65-plus Guaranteed Growth Bonds online or over the phone up to 11.59pm on Friday next week. People can also buy the bonds by post - but applications made this way must be received by Friday next week or they will not be processed.
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NS&I recommends that people allow plenty of time to get their postal applications into make sure they do not miss the cut-off point. As deadline day approaches, customers calling NS&I to request forms in the post will be advised of the deadline for sales and will be offered the chance to buy the bonds over the phone if they wish.
The bonds, which have been released as savers continue to be hammered by low interest rates, enable people to save into a one-year bond paying annual interest of 2.8% and a three-year bond paying a yearly rate of 4%. There is an investment limit of £10,000 per bond per person.
The stampede when the bonds first went on sale meant that NS&I's website initially struggled under the weight of demand.
NS&I is a Treasury-backed body, meaning that the money invested with it is guaranteed as being completely secure.
The rates on the bonds are significantly higher than other similar deals on the market generally, according to financial information website Moneyfacts.
Both the one-year and the three-year 65-plus bonds sit at the top of Moneyfacts' "best buy" tables. Savers looking for similar alternatives to the one-year bond could consider a 12-month bond from Al Rayan Bank or a one-year bond from FirstSave, which both pay a rate of 1.9%.
Meanwhile, sitting just below NS&I on the three-year fixed bond "best buy" table is a fixed rate savings account from AgriBank, which pays a rate of 2.77%. Clydesdale Bank offers a three-year fix with a rate of 2.46%.
Rachel Springall, a spokeswoman for Moneyfacts, said: "We may be looking at a second stampede for those who have yet to take out the pensioner bonds as the closure deadline is only one week away.
"Pensioner bonds have the best rates on the market, so even the current standard 'best buy' rates are poor in comparison."
Ms Springall continued: "Even though Isas provide shelter from tax, the majority of the top three-year deals pay just 2%, so it's clear to see why the 65-plus bonds have been so popular on rate alone."
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Banks have also seen evidence of the impact of the bonds. The British Bankers' Association (BBA) has previously reported seeing a sharp fall in the amount of cash held in personal deposits with high street banks as savers rushed to get their hands on the bonds.
When the bonds initially went on sale, a pot of up to £10 billion was put aside for them, leading some savings experts to predict that the bonds could be a case of "blink and you'll miss them".
On February 8, Chancellor George Osborne announced that the bonds would be kept on sale until May 15.
It is expected that by extending the sale, more than a million older savers will benefit and around £15 billion-worth of bonds could be sold.
More information about how to apply for the bonds can be found at nsandi.com.
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