No interest paid to those who cool off

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The Independent Online
MANY investment products must now allow investors a 'cooling-off' period in which to change their minds, and National Savings voluntarily added one to its First Option Bond.

One investor who missed out on the original rate of interest offered by First Option - cut with less than 24 hours' notice last week - felt, however, that National Savings was not adhering to the spirit of the cooling-off period.

The investor, who prefers not to be named, was one of thousands telephoned by National Savings to be told that his application for the bond - posted last Monday - had not arrived in time to receive the original rate of interest, 7.75 per cent net.

'National Savings said I had to make up my mind straight away whether I wanted to invest at the new rate.'

In reality, investors are no better off if they withdraw within the 28-day time-limit rather than at any time during the first year: they do not receive any interest in either case.