New bond offers 7.5% tax-free

M&G is launching a five-year bond to compete with the new 38th issue of National Savings Certificates, which pay 7.5 per cent tax-free over five years. M&G's Guaranteed Bonus Bond will invest in gilts to pay a guaranteed 8.5 per cent, after tax, to a basic rate tax payer. The equivalent rate to a higher rate tax payer will be 7.38 per cent.