Earn up to 4.50% AER with NS&I’s new British Savings Bonds

The new issues are currently on sale, but are higher returns available elsewhere?

Savers have the opportunity to earn up to 4.50% AER with new, higher-paying issues of the British Savings Bonds from National Savings & Investments (NS&I) which went on sale today.

Its one-year Guaranteed Income and Growth Bonds offer this rate monthly or on anniversary, respectively. Alternatively, savers can lock-in a slightly lower rate for longer with their two-, three- and five-year counterparts.

^{Source: National Savings & Investments}

Available to new and maturing customers, these accounts require a £500 minimum deposit to open and manage online, however, it’s important to consider your opening amount carefully as neither early access or further additions are allowed.

How do the British Savings Bonds compare?

These latest changes to NS&I’s range of British Savings Bonds follow average savings rates trending upwards over recent weeks. Many providers have been hiking returns amid ongoing conflict in the Middle East and expectations for the Bank of England base rate to stay higher for longer as it looks to keep inflation in check.

“It is worth noting that when the UK experiences an economic crisis, NS&I can step up to entice deposits to help the Government to raise money and support the economy, which we have seen in the past,” said Rachel Springall, Finance Expert at Moneyfactscompare.co.uk. However, she added that NS&I will take steps “to ensure they are not sitting head and shoulders above the competition”.

While its Guaranteed Growth and Income Bonds better inflation and pay above the Moneyfacts Average Savings Rate (3.48% today), there are still higher returns being offered.

Nevertheless, Springall explained that NS&I’s British Savings Bonds may still appeal to “savers with big pots who are happy to forgo higher interest rates available elsewhere” as they are uniquely 100% backed by HM Treasury. This is in contrast to deposits in standard savings accounts which are only covered up to £120,000 by the Financial Services Compensation Scheme (per banking licence).