Rise in Interest Rates on Two NS&I Savings Accounts: A Comparative Analysis
In a move to attract more customers, NS&I has announced an increase in the interest rate for new issues of its 1-year-fixed-term British Savings Bonds to 4.18%. This comes as a response to the rising competition in the savings market.
The new bonds are now available to new customers and those with existing NS&I one-year bonds that are maturing soon. However, this rate still lags behind the top fixed-rate bonds available from other providers.
Currently, the top one-year fixed savings account interest rates on the UK market are around 4.58% AER, offered by providers such as GB Bank. Other leading one-year fixed rates include about 4.52% from Conister Bank and 4.50% from LHV Bank.
In comparison, NS&I’s one-year fixed-term British Savings Bonds offer a guaranteed interest rate of 4.18% AER. While this rate has increased from a previous 4.05%, it still falls slightly behind the market leaders.
| Provider / Product | Interest Rate (AER) | Notes | |----------------------------------------|---------------------|--------------------------------------------| | Top One-Year Fixed Savings Accounts | Up to 4.58% | E.g., GB Bank; market leading[4][3] | | NS&I One-Year Fixed-Term British Bonds | 4.18% | Government-backed with high security but slightly lower rate[2] |
NS&I bonds offer the advantage of government backing with protection up to £1 million and a straightforward, risk-free return without prize draws like Premium Bonds, whereas some commercial banks offer higher rates but may have different protection limits and conditions.
The new bonds can be bought from July 24, 2023. It is worth noting that NS&I has recently cut rates on longer-dated bonds, which may indicate a strategic shift in their savings product offerings.
For savers seeking the highest fixed one-year returns as of July 2023, market-leading savings accounts provide about 0.4 percentage points higher interest than NS&I’s one-year bonds, but with slightly different risk profiles and protections[2][3][4].
Meanwhile, the top fixed term savings account on the market by AlRayan Bank offers an interest rate of 4.6% for one-year fixed savings, requiring a minimum of £10,000 and a maximum of £85,000.
NS&I Retail Director, Andrew Westhead, has stated that the new opportunity to save is good news for savers. The decision to raise the interest rate on one-year fixed-term bonds comes as part of NS&I's commitment to providing competitive savings products for its customers.
For those interested in comparing the best savings accounts for the highest interest rates on the market, a separate article is available.
- The new interest rate for NS&I's 1-year-fixed-term British Savings Bonds is now 4.18%, making them more attractive to customers.
- The newsletter can provide details about the increase in interest rates for NS&I's one-year fixed-term British Savings Bonds.
- Personal finance enthusiasts may find it beneficial to compare the interest rates of other fixed-term bonds, such as those offered by GB Bank, Conister Bank, and LHV Bank, to NS&I's one-year fixed-term British Savings Bonds.
- Those seeking the highest fixed one-year returns on their personal-finance investments may prefer market-leading savings accounts over NS&I's one-year fixed-term British Savings Bonds, as they offer a slightly higher interest rate but have slightly different risk profiles and protections.
