National Savings and Investments has announced increases to rates on its British savings bonds, with several products now exceeding 5% in annual returns. The move reflects intensifying competition within the savings market, which has driven rates to multiyear highs across the sector.
NS&I’s rebadged guaranteed growth bonds and guaranteed income bonds now offer fixed rates across one-, two-, three-, and five-year terms. The one-year growth bond has risen to 4.99%, the two-year to 5.07%, the three-year to 5.1%, and the five-year to 5.17%. These products are accessible to both new customers and existing account holders with maturing bonds. Interest accrues annually in the growth version and is paid upon maturity, while the income variant distributes interest on a monthly basis.
Financial analysts caution that rates at these levels may prove temporary. As rates become more attractive, providers often withdraw products from the market once they accumulate sufficient deposits. Observers note that while NS&I’s offerings are competitive, higher rates remain available elsewhere, with some providers offering rates exceeding 5.3% on five-year fixed bonds, though often from lesser-known institutions.
NS&I bonds offer particular advantages for large sums, allowing investments of up to £1 million per person with a minimum of £500, and providing Treasury backing that secures deposits entirely, unlike standard bank guarantees capped at £120,000. However, funds deposited in these bonds cannot be accessed before the fixed term concludes. For those requiring withdrawal flexibility, alternative options have emerged, including Starling’s Easy Saver account offering a 5% rate with unlimited penalty-free withdrawals. Meanwhile, Marcus by Goldman Sachs increased its one-year fixed-rate account from 4.3% to 4.75%.
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