National Savings left with 2.3bn pounds old certificates: Meagre rates of interest paid

Click to follow
The Independent Online
NATIONAL SAVINGS is writing to 200,000 holders of savings certificates this month to remind them that their certificates have matured.

But it is a drop in the ocean compared to the pounds 2.3bn of matured certificates earning a much lower rate of interest than on current issues.

NS certificates, because they are a five-year investment and tax-free, tend to be bought, filed away and forgotten.

At the end of the five-year term the fixed-interest certificates go on to an extension rate - a tax free 3.51 per cent for most issues.

But some issues from the 1970s are now paying just 1 per cent - a meagre rate compared to the 5.4 per cent on the current 41st issue five- year, fixed-interest certificates, although not such a bad deal compared with instant access accounts.

One of the highest paying and most popular fixed-interest issues was the 19th. It paid 10.33 per cent and was on sale between February 1980 and May 1981. But this is the issue with the most unclaimed matured certificates - about pounds 250m worth.

For years, NS did not tell people that their certificates had matured. It has now changed its policy and is making an effort to notify holders.

Throughout this month 200,000 holders of matured certificates, bought between 1985 and July 1988, are being sent reminders. But only people who bought centrally through the National Savings office in Durham can be contacted, not those who bought over a Post Ofice counter.

If you bought after July 1988, and you do not reinvest or cash in on the maturity date or six weeks after, then NS will contact you.

In practice, people move house and inevitably forget to tell National Savings their new address.

It is only for purchases since mid- 1992, that NS has been asking holders to inform it when they move.

National Savings, Millburngate House, Durham DH99 1NS.

Looking for credit card or current account deals? Search here

Comments