NS&I has raised interest rates across its full range of British Savings Bonds, with some fixed-rate options now paying more than 5% for the first time.
From 6 October, new Issues of the 1, 2, 3 and 5-year Guaranteed Growth Bonds and Guaranteed Income Bonds went on sale with higher rates, replacing Issues that had been on sale since 18 August. The 5-year Growth Bond rose furthest, from 4.85% to 5.17% gross/AER, while the 1-year Growth Bond increased from 4.82% to 4.99%. The 2-year and 3-year bonds now also pay above 5%.
The bonds require a minimum deposit of £500, with a maximum of £1 million per person per Issue. Savers cannot withdraw funds early, but can choose between income paid monthly or growth paid at maturity, and can cash in or reinvest at the end of the term.
For clients with surplus cash or savings earmarked for the medium term, the rise gives a government-backed option for locking in a fixed return, though it is worth comparing rates elsewhere first, as some providers still pay more. The increase is the latest in a series of adjustments NS&I has made this year in response to the wider savings market.
Andrew Westhead, NS&I’s Retail Director, said: “We’re pleased to be increasing interest rates across our 1, 2, 3 and 5-year British Savings Bonds,” adding that money invested with NS&I is “100% secure and backed by HM Treasury.”