National Savings and Investments (NS&I), known primarily for its Premium Bonds product, has recently launched the new British Savings Bonds in a boon for savers but how does it compare with other savings accounts?
The latest savings product was announced by the former Chancellor Jeremy Hunt earlier this year with NS&I confirming their interest rates this week.
What are British Savings Bonds?
Introduced to improve savings opportunities, NS&I's latest offering includes new three-year fixed-rate Issues of the Guaranteed Growth Bonds and Guaranteed Income Bonds.
These accounts will provide customers a guaranteed rate over three years for investments between £500 and £1million.
Similar to all other cash invested into , money invested will be 100% secure as it is protected by HM Treasury with money being invested back into the UK.
While the bonds only went on sale in early April, the interest rates were confirmed earlier this week.
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Many savers take advantage of NS&I's products
GETTYThere are currently three options for savers as part of the British Savings Bonds, including a two-year bond paying, a three-year bond paying and a five-year bond.
Those who have an existing bond that is close to maturing are able to pick a one-year bond paying 5.15 per cent but this is not available to new customers.
It should be noted that savers are unable to withdraw their money until the end of their fixed term.
This means they will have to wait many years before accessing their money depending on which account they have opted for.
How does the British Savings Bonds compare to other banks?
Here is a comparison of how NS&I's Guaranteed Growth Bonds compare to what is being offered by other banks in the UK:
- Two year: 4.6 per cent British Savings Bonds / 4.96 per cent
- Three-year fix: 4.35 per cent British Savings Bonds / 4.72 per cent Hodge Bank
- Five-year fix: 4.1 per cent British Savings Bonds / 4.5 per cent United Trust Bank
- Easy-access: four per cent Direct Saver / 5.2 per cent Ulster Bank
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NS&I has relaunched multiple fixed rate bonds
NS&I;Dan Harkins, the chief executive of NS&I, broke down why Britons should consider taking out a British Savings Bond.
He explained: "It is 15 years since we last had 2- and 5-year fixed-term Bonds on general sale to new investments.
"The two new Issues, along with a rate increase for our 3-year Bonds, provide NS&I savers with increased choice and longer-term security in a changing market.
“Today’s changes will help us to meet our Net Financing target while continuing to balance the interests of savers, taxpayers and the broader financial services sector.”