New Guaranteed Equity Bond from NS&I offers growth potential linked to the FTSE 100 Index

This will offer a gross return that matches any FTSE 100 Index growth, up to a maximum return of 75%, over the five-year term of the Bond, without any risk to investors’ capital.

• New GEB Issue 15 on sale 21 May - 1 July 2008 (will close earlier if fully subscribed)
• Invest online, by phone or by post

For example, if the FTSE rose by 20% over the five-year term, £10,000 invested would earn a gross return of £2,000 (customer receives £12,000 in total) at the end of the five years. If the FTSE rose by 80% over the five years, £10,000 invested would earn a gross return of £7,500 (customer receives £17,500 in total), as the maximum return is 75%.

If the FTSE falls or stays the same over the term, investors’ initial investments are returned in full.

While the returns paid on NS&I Guaranteed Equity Bonds are linked to the FTSE, NS&I does not invest the money in equities, so investments in the Guaranteed Equity Bond will not be eligible for dividends. Therefore investors may not get as high a return as they might through investing directly in the stock market. However, unlike investments in the stock market, any money invested is 100% secure.

The launch of GEB 15 coincides with the maturity of Issue 5 of NS&I’s five-year Guaranteed Equity Bond on 17 June 2008. Issue 5 went on sale in May 2003, with a maximum return of 65% gross over five years and a FTSE start level of 4155.40. NS&I will be writing to investors this month to remind them that their Bond is about to mature and to let them know about the new issue of NS&I’s Guaranteed Equity Bond.

NS&I GEB offer period

Issue 15 of the GEB goes on sale for a limited period from 21 May to 1 July 2008. It may close earlier if fully subscribed so investors are encouraged to invest early, particularly because their investment will earn interest at 4.50% p.a. gross until the Bond’s investment term starts on 16 July 2008. This interest will be paid when the Bond matures. The minimum investment level for this GEB remains at £1,000 and the maximum investment is £1 million per person or £2 million for a joint investment.

NS&I Guaranteed Equity Bond key features

• A five-year investment
• No fees or charges
• Minimum investment of £1,000 and a maximum of £1 million (£2 million for joint investments), (online and telephone investments have a transaction limit of £99,999 but customers wanting to invest can make multiple applications)
• A gross return that matches FTSE growth, up to a maximum of 75%, over the term of the investment
• The start and end FTSE 100 index levels allow for initial five days averaging and final six months daily averaging
• 100% guarantee that customer’s original investment will be returned at the end of the five-year term, regardless of the performance of the FTSE 100 index, backed by HM Treasury
• All returns paid gross at maturity; returns liable to UK Income tax Investors do not receive dividends
• No access to the funds invested once the term has started except upon death

How to buy NS&I’s Guaranteed Equity Bond

Investors can apply online at www.nsandi.com, by phone with a debit card on 0500 500 000* or by post using an application form which can be requested by phone or downloaded from NS&I’s website at www.nsandi.com. Application forms for the NS&I Guaranteed Equity Bond will not be available at the Post Office.

Notes to Editors

1. NS&I has case studies of customers who have previously invested in NS&I’s Guaranteed Equity Bonds available on request
2. Inflation may reduce the true value of the original capital over time.
3. Past performance is not an indicator of future performance
4. NS&I is one of the largest savings organisations in the UK which offers a range of savings and investments products. It has around 28 million customers and £84 billion invested. All products offer 100% security, because they are backed by HM Treasury.