Published On: Mon, Nov 11th, 2019

NS&I: What are Children’s Bonds? How do Children’s Bonds work? | Personal Finance | Finance

Saving for children or grandchildren is something which many people may decide to do for a whole host of reasons. In the past, some may have opted to buy Children’s Bonds for youngsters. However, these investments are no longer on general sale from NS&I.

Children’s Bonds were sold in “Issues”, each with a specific interest rate that is guaranteed for the five-year term.

The minimum balance for each Bond was £25, and savers were able to invest £3,000 per child per Issue.

Interest earned was free from UK Income Tax and Capital Gains Tax, and this is for both the child and the parent or guardian.

The Bonds are in the child’s name, however their parent or guardian are required to look after the investment until the child is 16.


While Children’s Bonds are no longer on general sale, the current Issues are only for existing customers renewing their Bond at maturity.

What happens at the end of the investment term for Children’s Bonds?

NS&I explains that around a month prior to the end of the term, they will get in contact with the person who controls the Bond.

This will be in writing, and NS&I says they will explain the options which are available at this time.

Should a person not have heard from NS&I 30 days before the end of the five-year term, they are instructed to call NS&I.

While Children’s Bonds may not be for sale, it is possible to buy Premium Bonds.

Rather than getting guaranteed returns on the investment, holders of Premium Bonds are entered into a monthly prize draw.

The odds of winning for each £1 Bond number are 24,500 to one.

The minimum investment in Premium Bonds is £25, while the maximum investment is £50,000 per person.

Premium Bonds can be bought by any adult for a child who is under the age of 16, following a change in the rules.

However, a child can only hold up to a maximum of £50,000.

The Bonds will need to be managed by the child’s parent or guardian, with any paperwork, prizes won, and payment for cashed in Premium Bonds being sent to this person.

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