In the last Budget in March, it was announced that the government would offer a green retail savings product through National Savings and Investments (NS&I) this Summer.
The funds raised through the product will be used to fund the government's green spending projects to tackle climate change.
Some details have now been announced although the most interesting part; the interest rate; is conspicuous by its absence from the announcement.
Here's what was announced about how the bond will be structured:
3-year fixed term.
Designed to be held for the whole term, but with a cooling-off period in the first 30 days of investment.
Available to savers aged 16 and over.
Available to buy and manage online
Investment limits apply: minimum of £100 and maximum of £100,000 per person and can be made individually or jointly.
Fixed rate is guaranteed for the whole term. Interest is earned daily and added once a year on the investment's anniversary, and paid on maturity.
Interest is earned without deducting any tax at source. However, the interest is taxable so it will count towards the Personal Savings Allowance in the tax year that the Bond matures and needs to be declared by the individual based on their personal tax circumstances.
Comment
It is great to see a product launched by NS&I that will allow savers to help fund the government's climate change plans; as a firm we are very much in favour of this. The 3 year fixed term and apparent lack of accessibility during this time may not suit everyone, however.
It will be interesting to see how generous NS&I are in terms of rate. At the moment, the top 3 year fixed rate is paying a shade over 1.3%. Given the extremely competitive nature of the 65+ bond launched by NS&I shortly before the election in 2015, we can but hope for another market leading rate. Whether this will be the case though, remains to be seen. We'll let you know as soon as we hear more.
Like what you read? Click here to have our articles sent straight to your inbox in future
Please refer to our Legal Declarations page.