NS&I launches new fixed-rate savings accounts – here’s what’s on offer

National Savings and Investments has launched a new range of fixed-rate savings bonds for those wanting to lock their money away. 

The Treasury-backed bank has launched new issues of its Guaranteed Growth Bonds and Guaranteed Income Bonds, collectively known as British Savings Bonds.

Savers will now be able to open new two, three and five-year bonds, while NS&I has also boosted the rates it pays on its existing two and three-year bonds. 

New NS&I customers can open the bonds as well as existing customers whose bonds are maturing. 

In April, NS&I launched new issues of its one, two, three and five-year fixed rate savings accounts. It was the first time these accounts had been available with NS&I at the same time. 

The rates on the issues launched today have fallen from the previous issues, however, in a blow to savers seeking better returns for locking their money away.   

The new two-year British Savings Bonds have been cut to 3.85 per cent for both the growth and income options, previously these bonds payed 4 per cent. 

The three-year versions of the bonds will offer 3.88 per cent, down from the previous issue’s rate of 4.1 per cent.

The new interest rate on the five-year growth option is 3.84 per cent down from 4.06 per cent.

There is no change to the rate on the one-year British Savings Bonds, which remain at 4.05 per cent for both the growth and income option. 

At the same time, NS&I is changing the rate on its Junior Isa to 3.55 per cent. This is the first time the rate has changed on the Junior Isa since August 2023, when it was 4 per cent. 

Andrew Westhead, NS&I retail director, said: ‘Today’s announcement is in response to changes in the wider market and will ensure we continue to offer a range of fixed-term options while balancing the interests of savers, taxpayers and the broader financial services sector.’ 

How do NS&I rates compare? 

The rates now fall well short of the best-buy fixed rate savings deals.

The top two-year fixed rate bond on the market pays 4.43 per cent and is offered by Cynergy Bank, compared to NS&I’s 3.85 per cent one-year bond.

Savers can also do better than NS&I’s three-year bonds by keeping their cash in the best three-year fixed-rate deals This pays 4.45 per cent and is offered by JN Bank.  

The best five year fixed-rate account pays 4.47 per cent and is offered by Birminggam Bank.

Meanwhile the NS&I Junior Isa lags behind the best buys which is currently offered by Bath Building Society and pays 4.65 per cent. However this account is restricted to existing members and local residents. The next best Junior Isa which is open to all comes from Coventry Building Society and pays 4 per cent. 

What are the benefits of saving with NS&I? 

Savers can put between £500 and £1million into the fixed rate bonds.

Unlike other savings accounts, all money is 100 per cent guaranteed by the Government. 

This means savers don’t have to spread their money between a number of savings accounts in order to make sure it is all protected, in the event that the provider goes under.

When using normal savings accounts with a bank, deposits are protected up to £85,000 per bank – so those with more money than that are advised to open multiple accounts with different institutions.

NS&I typically doesn’t offer the highest savings deals on the market to avoid skewing it.

The Treasury-backed bank said the new bond offerings balance the interests of savers, taxpayers and the broader financial services sector. 

Unlike Premium Bonds, these accounts are not tax-free.