NS&I RAISES INTEREST RATES ON BRITISH SAVINGS BONDS – ARE THEY ANY GOOD?
Savers have been given a boost after National Savings and Investment (NS&I) increased the rates on new issues of its British Savings Bonds.
The new issues of NS&I’s guaranteed and income one, two, three and five-year British Savings Bonds have gone on sale today and are available to new and maturing customers.
The products have rates between 4.15% and 4.20%.
The new launches come after the Bank of England held interest rates yesterday amid expectations of cuts in the coming months, which could push savings rates down.
It comes after NS&I cut the rates on its longer-dated British Savings Bonds in July so this may be welcome news for savers.
But these are by no means the best savings rates on the market.
What are the new interest rates on the British Savings Bonds?
The new interest rate on the one-year growth option is 4.20% AER and the income option is 4.20%. This is up from 4.04% in September.
The two-year growth option has a rate of 4.10% AER and the income option is 4.10%, up from 3.85%.
Savers can open a three-year growth option at 4.16% AER and the income option is 4.09%. This is an increase from 3.88%.
The new interest rate on the five-year growth option is 4.15% AER and 4.15% for the income option – up from 3.84% previously.
Savers will need a minimum investment of £500 to open an account and can invest a maximum of £1 million per person in each issue. After the fixed-term period, savers will have the choice to withdraw their cash or reinvest into a new term.
Existing customers who have already received their 30-day maturity letter will have the new increased interest rate for bonds maturing from today.
Andrew Westhead, NS&I retail director, said: "I’m pleased that we can offer increased interest rates on these fixed-term products, giving savers who want guaranteed returns a choice in how they invest, while continuing to benefit from the security of the 100% government guarantee.
"Today’s changes ensure we continue to balance the interests of savers, taxpayers and the broader financial services sector.”
Product | Previous interest rate (from 2 September 2025) | New interest rate from 7 November 2025 (on general sale) |
|---|---|---|
Guaranteed Growth Bonds 1-year (Issue 87) | 4.04% gross/AER | 4.20% gross/AER |
Guaranteed Income Bonds 1-year (Issue 87) | 3.97% gross/4.04% AER | 4.13% gross/4.20% AER |
Product | Previous interest rate (from 3 July 2025) | New interest rate from 7 November 2025 (on general sale) |
|---|---|---|
Guaranteed Growth Bonds 2-year (Issue 75) | 3.85% gross/AER | 4.10% gross/AER |
Guaranteed Income Bonds 2-year (Issue 75) | 3.79% gross/3.85% AER | 4.03% gross/4.10% AER |
Guaranteed Growth Bonds 3-year (Issue 77) | 3.88% gross/AER | 4.16% gross/AER |
Guaranteed Income Bonds 3-year (Issue 77) | 3.82% gross/3.88% AER | 4.09% gross/4.16% AER |
Guaranteed Growth Bonds 5-year (Issue 69) | 3.84% gross/AER | 4.15% gross/AER |
Guaranteed Income Bonds 5-year (Issue 69) | 3.78% gross/3.84% AER | 4.08% gross/4.15% AER |
How do British Savings Bonds compare with other savings products?
The rates on the British Savings Bonds are likely to be attractive as they beat inflation, plus you have the comfort of a government-backed bank.
Plus, you get the added benefit of knowing the money is being used to help raise money for the government to invest in the UK.
The Guaranteed Growth Bonds are a lump sum investment that earn a fixed rate of interest over the chosen term.
They are designed to be held for the full term and interest is calculated daily, then added to the bond once a year.
Meanwhile, Guaranteed Income Bonds pay out a monthly rate of interest to the bondholder’s bank account over the chosen term length.
However, savers will need to be careful about how much they put into the accounts as the returns are not tax-free so will count towards your personal savings allowance.
It is also possible to access higher savings rates of up to 4.5% on easy access accounts in the wider market from providers such as Chase and Revolut.
These products provide more flexibility as savers can withdraw their cash at any point rather than waiting for the NS&I bonds to mature.
Some of the best cash ISA rates are also paying around 4.53%, such as Trading212, which provides a higher and tax-free return for savers.
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2025-11-07T13:58:12Z