Table of Contents
- NS&I launches new issue of Guaranteed Growth and Income Bonds
- Guaranteed Growth Bonds pay 5.15% and Guaranteed Income Bonds pay 5.03%
- They are only available to customers who purchased one-year bonds last year.
If you are one of the 220,000 savers who accumulated £10bn of one-year issues of National Savings & Investments Guaranteed Income and Growth Bonds – the best ever – last year, you are in luck.
NS&I will write to offer a new one-year Guaranteed Growth Bond paying 5.15 per cent or a Guaranteed Income Bond at 5.03 per cent, we can reveal.
The offer is exclusive to existing bondholders and will be available when their current bond matures, starting at the end of next month.
NS&I launched the original one-year version of its Guaranteed Growth Bonds and Guaranteed Income Bonds last August, paying a record 6.2 per cent rate, a rate that marked a market high.
Stand firm or bend? NS&I to offer new one-year Guaranteed Growth Bonds paying 5.15% or a Guaranteed Income Bond at 5.03% to existing bondholders
This was the highest annual rate on the market at the time by a wide margin and far outpaced the competition.
NS&I raised £11.3bn of net funding for the Government in the 2023/24 financial year, the Treasury-backed bank revealed in its latest annual report and accounts.
This means it has exceeded its funding target of £7.5 billion, with a margin of plus or minus £3 billion for a range of £4.5 billion to £10.5 billion.
Its 6.2 per cent Guaranteed Growth and Guaranteed Income Bonds proved a big hit with savers.
Dax Harkins, chief executive of NS&I, said: Last summer we were significantly behind our net funding target, despite successive rate increases across our variable and fixed products.
‘In response, we launched new one-year issues of our popular Guaranteed Growth Bonds and Guaranteed Income Bonds.’
As a result of the market-leading rate, more than 220,000 savers rushed to accumulate £10 billion in these savings accounts.
Should you keep or rotate the NS&I solution?
NS&I appears keen to preserve bondholders’ cash, having made a poor start to meeting its funding target so far this year.
The rates on the new version of the bond are not as generous as the 6.2 percent and 6.03 percent that bondholders have enjoyed, but they are still competitive compared with other offerings on the market.
A saver who invested £10,000 in the new version of the NS&I Guaranteed Growth Bond would have £10,527 after a year, according to This is Money’s savings calculator.
NS&I confirmed that a customer will only be able to reinvest money already held in one of the bonds launched last year. If they wish to invest new money, they can choose to change tenors.
The best alternative is a one-year bond with a rate of 5.4 percent from the Union Bank of India.
A saver who keeps £10,000 in this account for a year will have £10,554 when the account matures.
GB Bank follows, paying 5.26 percent at one year.
A saver will have £10,539 after one year with an initial investment of £10,000.
With an NS&I savings account, because they are backed by the Treasury, any money you invest is 100 per cent protected, and these bonds allow you to deposit up to £1 million.
Even if you invest more than the amount supported by the Financial Services Compensation Scheme (FSCS) – up to £85,000 per person or £170,000 for joint accounts.
Guaranteed Growth Bonds and Guaranteed Income Bonds are taxable, unlike some NS&I products.
This means that savers must be vigilant in order not to exceed their personal savings limit.
The new one-year bond is not available to new NS&I bond customers, but they can buy a three-year bond at 4.15 per cent.
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