The three-year fixed-rate British Savings Bonds announced by the Chancellor of the Exchequer in the Spring Budget are now on sale. The Guaranteed Growth Bond option is available at 4.15% gross/AER and the Guaranteed Income Bond is 4.07% gross/4.15% AER.
British Savings Bonds are new three-year fixed-rate Issues of NS&I’s Guaranteed Growth Bonds and Guaranteed Income Bonds. They offer savers a guaranteed interest rate fixed over three years for investments between £500 and £1 million. The intention is for the new British Savings Bonds to be available for an extended period of time. They are available to purchase online at nsandi.com.
Like all savings from NS&I, money invested will be 100% secure, backed by HM Treasury, and invested back into supporting the UK through government financing.
Is it a good deal for savers?
For savers with balances in excess of £85,000, the Financial Services Compensation Scheme (FSCS) limit, these bonds may be appealing in that you can deposit up to £1 million which is fully protected via HM Treasury.
Those with smaller balances can currently get a 3 year fixed rate bond paying 4.65% with Hampshire Trust Bank or Close Brothers Savings.
That extra 0.5% on the rate is worth £250 per year to someone with a £50,000 balance and £750 over the 3 year term.
For a saver with a £20,000 pot it’s £100 per year and £300 over 3 years, so worth looking at other fixed rate options.
Bim Afolami, Economic Secretary to the Treasury, said:
“This is a new opportunity for UK savers to benefit from the three-year fixed-rate British Savings Bonds knowing that their money is fully protected by HM Treasury. The Bonds will help to grow the savings culture in the UK while providing cost-effective financing for the government.”
NS&I Chief Executive, Dax Harkins, said:
“British Savings Bonds are there to help people save for the longer term and support their savings goals, safe in the knowledge that their investments are 100% protected. As with all savings with NS&I, money is invested back into supporting the UK through government financing.”
