Granny Bond

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Granny Bond

A savings bond with an interest rate linked to an index such that the return stays ahead of inflation. This is useful for people on fixed incomes who otherwise might suffer from an inflation tax; that is, they may otherwise see their savings decrease in real value. It is available in the United Kingdom to people over retirement age.
References in periodicals archive ?
"But they've stopped doing the granny bonds, so I've told her not to expect anything like as much interest when hers run out."
The public knew them as "granny bonds" because they were initially only available to pen- sioners - and the maximum you could invest was pounds 500.
I invested my redundancy money in Granny Bonds and, in those days, got about pounds 150 per month in interest.
NATIONAL SAVINGS Index-linked certificates (Granny Bonds) pay 2.5 per cent more than the rate of inflation over five years.