State-backed provider NS&I has released new issues of British Savings Bonds offering higher interest rates.
Launched on Tuesday, the updated fixed-term products cover one, two, three and five-year terms. These higher rates are accessible to new customers as well as savers with maturing bonds.
British Savings Bonds represent fixed-term releases of NS&I’s Guaranteed Growth Bonds and Guaranteed Income Bonds. Under the revised terms, the interest rate for the one-year option has risen to 4.99% AER (annual equivalent rate) from 4.82% AER.
NS&I noted that the increases align with wider market developments and will support its net financing targets, while maintaining a balance between the interests of savers, taxpayers and the broader financial services sector.
On the two-year version, the new rate is 5.07% AER, increasing from 4.81% AER.
The three-year option has a new rate of 5.10% AER, up from 4.83% AER.
The new interest rate on the five-year option is 5.17% AER, increasing from 4.85% AER.
Andrew Westhead, NS&I retail director, said: “We’re pleased to be increasing interest rates across our one, two, three, and five-year British Savings Bonds, responding to changes in the wider market and giving savers the certainty of a guaranteed return for the duration of their chosen term.
“Alongside these improved rates, customers continue to benefit from the reassurance that all money invested with NS&I is 100% secure and backed by HM Treasury.”
Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said: “NS&I has given its British Savings Bonds a welcome boost, with rates rising across the board and its two, three and five-year options now paying above 5%.
“However, savers will find rates higher elsewhere, as all these newly-priced bonds from NS&I sit outside of the top rate tables.”
Ms Springall said the rate rises from NS&I reflect the wider uplift in savings rates and expectations surrounding future interest rate decisions.
She said: “Competition in the savings market is good news for consumers, but attractive deals don’t always last for long, particularly if a provider attracts enough deposits and pulls a product from sale.”
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