NS&I unveils new fixed-rate bonds offering up to 5.17% interest

National Savings & Investments launched a new range of fixed-rate products, offering Guaranteed Growth Bonds with returns between 4.99% and 5.17% and Guaranteed Income Bonds paying slightly lower rates but disbursing interest each month. The one-year Growth Bond at 4.99% is the best rate available to all savers since a brief 6.2% offer in August 2023, while the five-year option reaches 5.17%. This marks the fifth rate rise this year as NS&I strives to help the Government raise £15 billion by next March, a target it is currently missing.

Rival banks are already offering rates up to 5.12%, narrowing the advantage of NS&I’s safety guarantee, which covers all deposits unlike the £120,000 FSCS limit elsewhere. The agency expects competitors to push rates higher, potentially prompting further NS&I adjustments. Savers must consider tax implications, as Growth Bond interest is taxed in the year it is paid, whereas Income Bonds avoid this by providing monthly payouts.