Video explains National Savings and Investments Children's bonus bonds, 5 year, fixed rate, tax free investments for children.
“Hello there. Phew, it’s January, it’s the sun, I’ve got sun in my eyes, it’s a miracle. Continuing my theme for children's savings: Children's Bonds, National Savings and Investments children's bonds. Children’s Bonus Bonds.
Okay how do they work? So as per previous [videos] in my children’s saving series I’ve covered some other national savings products already. So national savings: fundamentally backed, guaranteed by Her Majesty’s government, so nice and safe and secure.
Children's bonds: the way they work is national savings periodically issue new ‘issues’ of children's bonds and at the time of shooting, January 2015, the current are five-year fixed rate of interest is 2 and 1/2% tax free, so that’s 2.5% tax-free for the current issue appreciating you may be watching this video later on down the line and we may have moved on to a different issue.
But in simplistic terms children's bonds:
[And] that's fundamentally what a children's bond is: five-year fixed rate investment, tax-free, for a child nominated, so usually in the name of parent or guardian and nominated for the child.
It is tax-free, you can withdraw, encash early, there maybe some loss of interest or penalties, likewise if you hold to the full five-year fixed term maturity there may be a bonus payable but backed by National Savings and Investments, ultimately, like I say, protection thereof Her Majesty's government.
So as part of any portfolio I’ve covered the range of different types of investment for your children and certainly you should think about considering children's bonds from National Savings. Thanks very much for watching.”