Savers will be given a choice

SAVERS who invested in the first issue of National Savings First Option Bonds, which went on sale on 7 July 1992, will shortly receive letters explaining what they can do with their investments after the first anniversary, writes Maria Scott.

Investors must hold their bonds for a year to receive any interest and this will be credited on the anniversary. The first issue of bonds guaranteed a gross rate of 10.34 per cent, or 7.75 per cent after basic rate tax.

A lump sum of pounds 20,000 or more will be entitled to a bonus of 0.4 per cent gross (0.3 per cent net) on the first anniversary.

A spokeswoman for National Savings said the letters would spell out the rate to be paid to people who decided not to cash in their savings. When the bond was launched National Savings said savers would be automatically moved into a new one-year fixed rate bond unless they pulled out.

The spokeswoman would not be drawn on whether the rate would be the same as the rate paid on the current issue of First Option Bonds - 4.75 per cent net - or whether there would be a special deal on maturing bonds.

Total gross sales of all National Savings products in May amounted to pounds 594m. After repayments of pounds 568m net receipts totalled pounds 26m compared with pounds 87m in April.

Index-linked savings certificates were most popular with sales of pounds 72m in May, followed by premium bonds at pounds 34m and capital bonds at pounds 33m. The total amount invested in National Savings at the end of May was pounds 44.6bn.