This morning, National Savings and Investments (NS&I) announced that it was releasing a new issue (No 6) of its 3 year fixed rate savings bond at a rate of 3.95% AER.
This news will come as a huge disappointment to savers who were keen to do their bit for the planet via their savings choices, as the previous rate for these bonds was an extremely competitive 5.70% AER
In recent months NS&I attracted well over £7 billion from customers on the back of it’s best buy 1 year bond paying 6.20% – meeting its annual financing target from the government in a little over 1 month.
While its green savings bonds do not form part of the annual financing budget, the amount of annual funding required through Green Savings Bonds is agreed between HM Treasury and NS&I, alongside gilts issued by the Debt Management Office (DMO), as part of the Government’s Green Financing Framework.
The new 3.95% bond won’t come anywhere near the best buy tables with more than ten providers currently offering a 3 year fixed rate bond paying a rate of 5.50% AER or higher.