NS&I Raises Fixed-Rate Savings Interest to Support Household Finances
NS&I has raised interest rates on its fixed-term British Savings Bonds across one, two, three and five-year terms.
National Savings and Investments has announced higher interest rates on its fixed-term British Savings Bonds, making the government-backed institution's savings products more competitive across multiple investment terms. The increases apply to both Guaranteed Growth Bonds and Guaranteed Income Bonds, with savers able to access the improved rates through new accounts or reinvestment of maturing funds. All deposits remain fully protected by HM Treasury backing, distinguishing NS&I from commercial banks subject to deposit insurance limits.
Rate Increases Across All Terms
The rate adjustments span investment periods of one, two, three and five years, allowing savers to select durations that match their financial goals. Andrew Westhead, NS&I's Retail Director, stated that the increases provide certainty for savers who want to know their exact returns in advance, eliminating uncertainty about future earnings.
The announcement follows the Bank of England Monetary Policy Committee's decision to maintain the base rate at 3.75 per cent, amid ongoing inflationary concerns. NS&I's moves reflect similar actions by other banks and building societies responding to shifting market conditions. The organisation said the changes support its efforts to meet Net Financing targets while balancing the interests of savers, taxpayers and the wider financial services sector.
Investment Terms and Restrictions
British Savings Bonds require a minimum investment of £500 and allow a maximum of £1 million per person in each issue. Importantly, funds cannot be withdrawn early from these fixed-term products—a trade-off savers accept in exchange for guaranteed interest rates. This structure appeals to those seeking stability over liquidity and provides protection against market volatility.
NS&I's Treasury backing offers a key distinction from commercial competitors. Rather than relying on the Financial Services Compensation Scheme, which caps protection at £85,000 per customer per institution, NS&I deposits receive complete government protection. This feature has historically attracted conservative savers prioritising security over potentially higher returns elsewhere.
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