NS&I is offering its highest ever rate of 6.2% for a one-year fixed-rate guaranteed growth bond and is also increasing its revenue bonds.
- New issues of these products will pay a rate of 6.2%, previous issues will pay 5%
- This is the highest rate paid for these products since their launch in 2008.
- Rates have also increased to two, three, and five years, but they don’t top the chart.
National Savings & Investments has launched new issues of its fixed one-year Guaranteed Growth Bonds and Guaranteed Income Bonds to new and existing customers starting today, paying a premium rate.
The 6.2 percent growth guaranteed bond rate makes them the highest offered across the entire NS&I portfolio and a best buy for one-year fixed rate products.
This 1.2 percentage point increase brings the bill closer to inflation, which currently stands at 6.8 percent. Previously, the bonds offered 5 percent. Interest is paid at maturity.
The minimum investment is £500 and the maximum is £1 million in each issue. After one year, savers will have the option to withdraw their cash or reinvest.
King of Deals: NS&I New Releases Paying 6.2% Offer the Highest Rate of All NS&I Products
It has also increased the rate on its Guaranteed Income Bonds to 6.03 percent. This popular product pays interest monthly to a designated account.
Elsewhere, the best one-year fix is currently 6 percent, offered by several smaller providers. High income bonds pay up to 5.82 percent.
Rates for existing customers with two-, three-, and five-year bonds are also being increased when their current holding reaches maturity.
The rate has risen to 5.8 percent for two- and three-year bonds and 5.65 for five-year bonds.
These are only available to existing customers with maturing products and are not open to new customers.
The new rates on these are competitive but not top of the chart.
The best two-year fixed-rate bond is offered by Close Brothers Savings and pays a rate of 6.05 percent, while Hodge Bank’s three-year fixed-rate agreement pays 6 percent.
Tandem Bank offers the best five-year fixed offer on the market and pays 5.85 percent.
Treasury Economic Secretary Andrew Griffith says: “It is vital that savers are able to benefit from recent interest rate increases, so I am delighted that NS&I is launching new issues of guaranteed growth bonds and investment bonds. guaranteed at more than 6 percent, the highest rate since its launch.
“For added peace of mind, the Treasury offers a 100 percent guarantee on these savings.”
Dax Harkins, Chief Executive Officer of NS&I, says: ‘It was great to be able to put our one-year fixed rate Guaranteed Growth Bonds and Income Guaranteed Bonds back on the market in February of last year.
‘Today we can offer new Issues with an improved interest rate for clients who want the certainty of knowing how much they will earn on their savings in a year.
“At the same time, existing clients with maturing bonds can choose to invest at new, higher rates on two-, three-, and five-year guaranteed growth bonds and guaranteed income bonds.”
Guaranteed Growth Bonds and Guaranteed Income Bonds are taxable, unlike some NS&I products.
This means that savers must be alert to failure to meet their personal savings allowance.
The PSA offers basic rate taxpayers their first £1,000 of annual savings interest-free. Higher rate taxpayers get £500 and additional rate taxpayers have no PSA.
Read more here: Will you be hit with a tax bill on your savings as rates rise?