New British Savings Bonds introduced by NS&I: Analysis of the offered interest rate in contrast to existing ones.
New One-Year Fixed-Rate Bonds Launched by NS&I, but Competition Remains Fierce
National Savings & Investments (NS&I) has entered the fray with new one-year fixed-rate bonds, offering a rate of 4.18% on both growth and income options. However, the best one-year fixed savings rates currently exceed this offering, with providers like GB Bank and Castle Community Bank offering rates of 4.53% and 4.52% respectively.
GB Bank's 1 Year Fixed Rate Bond and Castle Community Bank's similar offering are among the highest fixed rates available, surpassing NS&I’s Guaranteed Growth and Income Bonds. The minimum deposit for these accounts ranges from £1,000 to £5,000, with maximum deposits up to £100,000 and £85,000 respectively.
| Provider | One-Year Fixed Rate (AER) | Minimum Deposit | Max Deposit | Notes | |-------------------------|---------------------------|-----------------|-------------------|------------------------------------| | GB Bank | 4.53% | £1,000 - £5,000 | £100,000 | Online account | | Castle Community Bank | 4.52% | £1,000 | £85,000 | Online account | | NS&I Guaranteed Bonds | 4.18% | £500 | £1,000,000 | Government-backed, Treasury-guaranteed |
While NS&I products are fully backed by the UK Treasury and offer a high maximum deposit, some banks provide better fixed rates for one year, though typically with lower maximum deposit limits.
For those prioritizing the very best rate on a one-year fixed savings product, options like GB Bank’s 4.53% fixed-rate bond currently offer superior returns compared to NS&I’s 4.18% bond. However, these do not have the same government guarantee beyond the FSCS limit of £85,000.
It is important to note that fixed rates require locking funds for the full term to earn the advertised rate. NS&I offers full government backing beyond the FSCS limit, a key consideration for very large deposits. Rates and terms can change, so verifying current offers before applying is recommended.
Approximately 180,000 savers will be faced with a decision about what to do with their savings next as the 5.15% bond comes up to maturity. The top one-year fixed rate bond on the market pays 4.53%, with GB Bank and Conister Bank offering this rate. However, NS&I has not yet confirmed whether it will offer another exclusive one-year deal for savers whose 5.15% bond is maturing at the end of this month.
[1] MoneySavingExpert.com, "GB Bank launches best one-year fixed bond at 4.53%," 13 April 2023. [Online]. Available: https://www.moneysavingexpert.com/savings/gb-bank-launches-best-one-year-fixed-bond-at-453/
[2] This is Money, "Castle Community Bank launches one-year fixed bond at 4.52%," 14 April 2023. [Online]. Available: https://www.thisismoney.co.uk/money/saving/article-11925135/Castle-Community-Bank-launches-one-year-fixed-bond-4-52.html
- For those seeking the highest one-year fixed savings rate, options like GB Bank's 4.53% bond offer superior returns compared to NS&I's 4.18% bond.
- Although NS&I's Guaranteed Bonds have a high maximum deposit limit, some banks provide better fixed rates for one year, despite lower maximum deposit limits.
- Personal-finance strategies that prioritize the top one-year fixed rate bond currently include GB Bank’s 4.53% fixed-rate bond and Conister Bank’s similar offering.
- Investing in mortgages or personal finance products should consider factors like the fixed rate, maximum deposit limits, government backing, and current market competition.
