The Treasury-backed savings provider National Savings and Investments (NS&I) has launched new fixed-rate savings accounts with rates of up to 4.85%.
NS&I is the "only savings provider that secures 100% of your savings, over £120,000", as it is guaranteed by the UK Government. This means savers are far less exposed to the risk of the provider becoming insolvent compared with private companies.
MoneySavingExpert highlights the new accounts
MoneySavingExpert.com, the personal finance website founded by Martin Lewis, highlighted the accounts as a good option for those looking to save with an established name and who can lock up funds over the longer term. They are particularly worth considering for savers with sizeable sums, as there is no need to spread savings across several banks to stay within the Financial Services Compensation Scheme (FSCS).
The FSCS protects savings up to £120,000 if an authorised private provider collapses. MoneySavingExpert says NS&I's new two-, three-, and five-year fixes will pay more than other established names on the market, with the one-year option only slightly less than the current leading overall rate.
Available products and terms
The products available include:
- 1-year bond at 4.82%
- 2-year bond at 4.81%
- 3-year bond at 4.83%
- 5-year bond at 4.85%
Deposits start at a minimum of £500 up to £1 million per issue, and funds cannot be withdrawn until the fixed term ends. An easy access account may be a better option for those uncertain about needing to take funds out earlier.
Guaranteed Growth and Income Bonds
The fixes are available as both Guaranteed Growth Bonds (GGBs) and Guaranteed Income Bonds (GIBs), two forms of British Savings Bonds.
With GGBs, interest is "calculated daily and paid when the product matures", the NS&I website explains. "The interest earned will count towards taxable income in the tax year the Bond matures if the individual’s threshold has been met."
Meanwhile, GIBs are a "lump sum investment that pays out monthly income at a fixed rate of interest over a set period of time (called ‘investment term’)". "Interest is calculated daily and is paid into the customer’s nominated bank account."
Savers can find out how this will affect their saving strategy on the MSE website. The personal finance outlet notes that higher fixed rates can be found outside of the big names, but it is important to check the terms to make sure the offering suits individual financial circumstances.
