The NS&I rate mentioned in this article is no longer available. Please see our article on the best fixed savings accounts for similar deals for one year fixed savings.
National Savings & Investments (NS&I) has boosted the rate on its one-year fixed bonds, making them one of the best savings accounts currently on the market.
The Premium Bonds provider has released new issues of its one-year fixed rate Guaranteed Growth Bonds and Guaranteed income Bonds – offering savers 6.2% AER, the highest ever rate since these products went on sale in 2008.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Previously they paid 5%. The boost makes them the most competitive one-year fixed rate savings account on the market. The products are available from today, 30 August. But note, they may not hang around for long - we explain why you need to act fast to bag NS&I's 6.2% rate.
Savings providers have been boosting their rates as they aim to pass interest rate hikes by the Bank of England (BoE) on to savers. Most have been slow to do so, drawing criticism from the FCA.
But NS&I’s latest boost is “brilliant news for savers, who have the chance to snag a top rate with a 100% Treasury guarantee, at around the peak for rates on one-year savings accounts”, says Sarah Coles, head of personal finance at Hargreaves Lansdown.
The BoE base rate currently sits at 5.25%, its highest level since 2008. Meanwhile the rate of inflation fell to 6.8% in July. While NS&I’s rates are still not inflation beating, they are starting to inch closer.
NS&I has boosted the rates on a number of its products over the past couple of months as it tries to draw in more cash from savers. It hiked the rate on its Premium Bond prize fund rate to a 24-year high early August, and it boosted the rate on its Green Savings Bonds to 5.7% – but they do have to be willing to lock their money up for three years.
How to get an NS&I one-year fixed bond
To invest in this product you’ll have to be willing to lock your money up for a year. Savers need a minimum investment of £500, and a maximum of £1,000,000.
Interest is paid on maturity. Once your bond matures, you’ll have the option to withdraw or reinvest your cash.
The savings provider is also boosting the rates on its fixed-term savings products, available only to savers with maturing products. You can see the rate increases on this table, supplied by NS&I.
| Product | Previous interest rate | New interest rate from 30 August 2023 (change in brackets) |
|---|---|---|
| Guaranteed Growth Bonds (2-year) | 5.10% gross/AER(from 13 July 2023) | 5.80% gross/AER (+0.70 percentage points) |
| Guaranteed Growth Bonds (3-year) | 5.10% gross/AER(from 13 July 2023) | 5.80% gross/AER (+0.70 percentage points) |
| Guaranteed Growth Bonds (5-year) | 4.25% gross/AER(from 1 February 2023) | 5.50% gross/AER (+1.25 percentage points) |
| Guaranteed Income Bonds (2-year) | 5.10% gross/5.22% AER(from 13 July 2023) | 5.65% gross/5.80% AER (+0.55 percentage points) |
| Guaranteed Income Bonds (3-year) | 5.10% gross/5.22% AER(from 13 July 2023) | 5.65% gross/5.80% AER (+0.55 percentage points) |
| Guaranteed Income Bonds (5-year) | 4.15% gross/4.23% AER(from 1 February 2023) | 5.37% gross/5.50% AER (+1.22 percentage points) |
How do other products compare and can you beat NS&I's top rate?
NS&I’s latest products offer the best rates available to savers looking for one-year fixed products.
The savings provider is 100% backed by the Treasury, which is part of its appeal. The FSCS compensation scheme, which most banks are protected by, covers only £85,000 of your money.
But you may be able to beat this rate with this one deal via Raisin which pays 6.1% plus a £25 cash bonus*. We explain how you can beat NS&I's 6.2% rate, details of the cashback deal and who can get the offer.
Other accounts you may be interested in are:
Investec’s 1 Year Fixed Rate Saver offers a rate of 6%, and you can open the account with £5,000.
Close Brothers Savings’ 1 Year Fixed Bond also offers 6%, and you need £10,000 to open the account.
And Kent Reliance’s 1 Year Fixed Bond offers 5.98%. You can open it with £1,000.
*When you sign up via this link, we may earn an affiliate commission from this deal.
Tickets are now on sale for our annual investment conference, the MoneyWeek Summit on 29.09.2023 in London. Book now at www.moneyweeksummit.com.
Book before 10pm on 8th September 2023 to benefit from our End Of Summer Offer: MoneyWeek subscribers can book 2 tickets for £399 (normally £499). Not a subscriber? Get £80 off standard tickets using code: DISCOUNT80.
-
Pension warning: one in five don’t know how much is going into their pensionHow to check your pension contributions and why it matters
-
50,000 power of attorney applications rejected – how to avoid common mistakesA freedom of information request shows that thousands of lasting power of attorney (LPA) applications are rejected due to errors. We explain how to avoid mistakes and reveal tips to make the process as straightforward as possible
-
Most Premium Bond holders never win – are they worth it?Premium Bonds There are over 20 million Premium Bond holders but most of us have never won a prize.
-
Millions of unclaimed Premium Bond prizes. Could some be yours?More than £84 million sits in unclaimed Premium Bond prizes. Could some of this money be yours? Here's how to find out.
-
One-year fixed savings drop below 6% - have they reached their peak?The best one-year fixed-rate savings deals have fallen below the 6% mark. Find out if saving rates have reached their peak and the current top rates on the market.
-
NS&I cuts interest rate on Green Savings Bonds - where can you get a better deal?News The state-backed bank has slashed the interest rate on its Green Savings Bonds from 5.7% to 3.95%
-
November NS&I Premium Bonds winners - check now to see what you wonIf you have money saved in NS&I Premium Bonds you can now check to see whether you have won a prize in the November prize draw. Here’s how to check your Premium Bonds.
-
Is NS&I safe?National Savings and Investments (NS&I) is popular for its Premium Bonds and savings products. But how safe is it?
-
October NS&I Premium Bond winners - have you claimed your prize yet?October NS&I Premium Bond winners were announced earlier this month - but have you claimed your prize yet? Here’s how to check you have not missed out
-
Act fast: HSBC to pull its 5.7% one-year bondSavers have until Wednesday to apply for HSBC’s one-year fixed-rate bond. The withdrawal of the account follows NS&I’s decision to pull its market-leading one-year bonds earlier this month. We explain why you need to act fast to secure the best rates.
