The provider is bringing back two Bond products as it boosts rate for new and current customers
NS&I has issued a statement about Premium Bonds as it increases its rates across several of its fixed-term Bond products. The provider has announced boosted rates across its British Savings Bonds, with two previous products back on the market with increased rates, one of which is up 0.67 percentage points.
With the new raft of improved rates, the group was asked if it would consider increasing the Premium Bonds prize fund rate, which fell from the April draw again. An NS&I spokesperson said: “NS&I reviews the interest rates on all of its products regularly and makes changes when they are appropriate to ensure that we continue to balance the interests of savers, taxpayers and the broader financial services sector.”
The prize fund rate for Premium Bonds took another hit from the April draw, dropping from 4% down to 3.8%, after the rate fell previously in December and January. Currently, the chance of each £1 Bond winning a prize sits at 22,000 to one.
From today (April 15), current holders and new customers with British Savings Bonds will get improved rates on the 2- and 3-year Bonds. New issues of the 1- and 5-year Bonds are also back on the market, with better rates than before.
British Savings Bonds are fixed-term issues of NS&I’s Guaranteed Growth Bonds and Guaranteed Income Bonds. The new rates include the return of the 5-year Guaranteed Income Bonds, back on the market today, with the rate rising by 0.67 percentage points, now standing at 4.06%, up from the previous 3.39%.
NS&I retail director, Andrew Westhead, said: “In today’s changing market, I’m glad we can offer savers who are looking for guaranteed rates greater choice, safe in the knowledge that their savings are 100% protected. Today’s changes will help us to meet our new Net Financing target while continuing to balance the interests of savers, taxpayers and the broader financial services sector.”
The increased rates on products previously on the market include:
- Guaranteed Growth Bonds 2-year (Issue 73) – 4% (up from 3.6%)
- Guaranteed Income Bonds 2-year (Issue 73) – 4% (up from 3.6%)
- Guaranteed Growth Bonds 3-year (Issue 75) – 4.1% (up from 3.5%)
- Guaranteed Income Bonds 3-year (Issue 75) – 4.1% (up from 3.49%).
These products are back on the market with increased rates:
- Guaranteed Growth Bonds 1-year (Issue 84) – 4.05% (up from 3.95%)
- Guaranteed Income Bonds 1-year (Issue 84) – 4.05% (up from 3.88%)
- Guaranteed Growth Bonds 5-year (Issue 67) – 4.06% (up from 3.4%)
- Guaranteed Income Bonds 5-year (Issue 67) – 4.06% (up from 3.39%).
Comparing the new rates with what else is on the market, Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “The biggest gap between the NS&I rate and the best deal on the market at the moment is in the one-year market, where NS&I offers 4.05% and the most competitive in the wider market is currently 4.65%.
“Out of all the fixed rate periods, one-year deals are the most popular, so it’s falling the furthest short in the biggest fixed market. The gaps for the rest of the range are also significant, given you can make 4.58% over two years, and 4.55% over three years and five years.”
She said the Bonds are particularly attractive if you have a large amount of savings, as you can deposit up to £1million and all your funds are backed by the Government, rather than the usual £85,000 protection limit under FSCS (Financial Services Compensation Scheme) rules.