NS&I cuts rate on its three-year fixed savings accounts

National Savings and Investments has cut the rate on its Guaranteed Growth Bonds and Guaranteed Income Bonds today due to their popularity among hard-pressed savers.

The cut means the rates have fallen from 2.2 per cent and 2.15 per cent respectively to 1.95 per cent and 1.9 per cent.

However, savers who have maturing three-year guaranteed growth bonds and three-year 65+ guaranteed growth bonds – otherwise known as pensioner bonds – will be able to roll over their investment for another three-year term at the higher rate of 2.2 per cent.

Although this is some way below the four per cent offered in 2015 when these were launched, it still gives a solid option for those happy to stick with NS&I for another three years.

Rate drop: NS&I has cut the rate on its three-year fixed-rate deals thanks to popularity

Rate drop: NS&I has cut the rate on its three-year fixed-rate deals thanks to popularity

Rate drop: NS&I has cut the rate on its three-year fixed-rate deals thanks to popularity

The deals, which are fixed for three years, can now be matched in the This is Money best buy tables over one year, making them far less attractive.

The top one-year deals are from Investec Bank and challenger bank Masthaven, who offer 1.9 per cent.

NS&I – backed by the Government – launched the three-year bonds at the start of December and said that demand has been high.

The minimum needed to open the accounts is £500 but importantly, they will accept up to £1million in.

Customers benefit from its 100 per cent HM Treasury security guarantee on all holdings with NS&I.


The decision by NS&I to cut the rate now means it slips from third best buy in our tables.

The top three-year fix comes from Ikano Bank at 2.26 per cent.

In the one-year stakes, Investec Bank and Masthaven offer 1.9 per cent.

Over 18 months, Investec Bank and Masthaven also offer 1.95 per cent.

For those looking for a two-year deal, Atom Bank and Ikano offer 2.1 per cent.

Check out the full list here: Best buy fixed-rate savings tables 

Money held in banks and building societies is covered by the Financial Services Compensation Scheme – but to a maximum of £85,000 per banking licence.

NS&I says its Investment Guaranteed Growth Bonds – a separate product launched by Chancellor Philip Hammond in his Budget last year – which offers 2.2 per cent over three years, is still available.

They only accepts investments up to £3,000 and close for new money on 10 April 2018. 

However, it is not clear how popular these accounts have been.

Jill Waters, retail director at NS&I, said: ‘It’s always a difficult decision to reduce rates, but these changes will allow us to manage demand in order to achieve our Net Financing target, while continuing to deliver positive value to taxpayers.

‘The new rates present a fair offer, and customers continue to benefit from a high holding limit and 100 per cent security on all deposits.’ 

NS&I’s Net Financing target for 2017-18 was revised at the Autumn Budget on 22 November 2017 to £8billion (in a range of £3billion either side of this, from £5billion to £11billion). 

Its most popular product is Premium Bonds, with around 21million people holding almost £72billion worth.

The pensioner bonds, launched in 2015, came with two options – a one-year fix and a three-year.

Those with the three-year have begun to see their accounts mature. They paid four per cent interest on balances up to £10,000 and it has left many with a decision as to what to do with the cash.

They can roll it over with a 2.2 per cent rate in the three-year NS&I product or move the money elsewhere. 



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