Ns&i Raises British Savings Bonds to 4.50% AER
ns&i has put new issues of British Savings Bonds on sale with a top rate of 4.50% AER. The move lifts the one-year fixed return from 4.07% and gives savers a Treasury-backed option with 100% security.
Rachel Springall on NS&I
Rachel Springall said, "NS&I are popular because they are a trusted brand and provide 100% capital security, so these bonds may appeal to savers with big pots who are happy to forgo higher interest rates available elsewhere." The bonds are open to new customers and to people whose existing bonds are due to mature, with a minimum investment of £500 and a cap of £1 million per person in each issue.
Four fixed-term rates
The two-year issue now pays 4.48% AER, up from 3.98%, while the three-year version has risen to 4.45% from 4.02%. The five-year option now pays 4.40% AER, compared with 4.05% before, giving savers a spread of fixed terms from one year to five years.
Funds in British Savings Bonds cannot be withdrawn early. After the fixed term ends, savers can take the cash out or roll it into a new term, which matters most for people locking away larger balances and wanting certainty on the return before they commit.
NS&I's wider pricing
NS&I also raised its postal-only Investment Account to 2.05% AER from 1.00%, a smaller step that still leaves it well below the new fixed-term bond rates. Springall said, "Savers who are enticed by the longer-term offerings from NS&I would be wise to shop around as there are many alternative bonds paying higher rates."
She added, "This includes fixed returns from building societies, such the market-leading five-year bond from Market Harborough Building Society paying 4.70%." She also said, "As it stands, Skipton Building Society are paying a market-leading rate of 4.55% on a short-term fixed Isa, fixed for 18 months."
