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Thursday, 2 March 2017

Nanny knows best - tax free interest on £3,000

I owe this tip to our nanny. One evening on returning from work, our nanny asked me if I could certify some documents for her. More than happy to do so, she explained to me that this was for the UK government's National Savings and Investments ("NSANDI") Children's Bond (https://www.nsandi.com/childrens-bonds).

Not really having paid much attention to these things in the past, given our son is only 16 months old, I spent some time looking into it.

Whilst this tip certainly won't make you a millionaire overnight, NSANDI's child bond allows you to invest up to £3,000 at a tax free interest rate of 2.5% per year for 5 years.

What's the catch? Well, seemingly very little, with investing starting from £25, it seems that the only hassle involved is the administration of setting the thing up under a parent or guardian's name. Any penalties? Only if you withdraw any sum of it early and this is only 90 days worth of interest.

A good buy? Most certainly. In this market where interest rates are rock-bottom, 2.5% per year tax free is not to be sniffed at...


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