NS&I is offering its highest-ever rate of 6.2% on one-year fixed rate guaranteed growth notes and is also increasing its income notes
NS&I is offering its highest-ever rate of 6.2% on one-year fixed rate guaranteed growth notes and is also increasing its income notes
- An interest rate of 6.2% is paid for new issues of these products and 5% for previous issues.
- This is the highest price paid for these products since their launch in 2008
- Rates have also risen for two, three and five years but are not at the top of the chart
National Savings & Investments launched new issuances of its one-year Guaranteed Growth Notes and Guaranteed Income Notes to new and existing customers today at a record rate.
With a 6.2 percent interest rate on the Guaranteed Growth Notes, they are the highest in NS&I’s product range and the best buy for one-year fixed income products.
This 1.2 percentage point increase brings the account close to the inflation rate, which currently stands at 6.8 percent. The bonds were previously offered at 5 percent. Interest is paid when due.
The minimum investment is £500 and the maximum investment is £1 million per issue. After one year, savers have the choice of withdrawing their money or reinvesting it.
The King of Deals: NS&I’s new launches offer the highest price of any NS&I product at 6.2%
It has also increased the interest rate on its guaranteed bonds to 6.03 percent. With this popular product, interest is paid monthly into a specified account.
Elsewhere, the best annual fix is currently 6 percent and is offered by a number of smaller providers. The top-income bonds pay up to 5.82 percent.
Existing customers with two-, three- and five-year bonds will also see their interest rates increase when their current holdings mature.
The interest rate has risen to 5.8 percent for two- and three-year bonds and 5.65 percent for five-year bonds.
These are only available to existing customers with maturing products and are not open to new customers.
The new tariffs for this are competitive, but not at the top of the table.
The best two-year fixed-rate bond is offered by Close Brothers Savings and pays an interest rate of 6.05 percent, while Hodge Bank’s three-year fixed-rate contract pays 6 percent.
The best five-year fixed deal on the market is offered by Tandem Bank and costs 5.85 percent.
Economy Secretary at the Treasury Andrew Griffith said: “It is important that savers can benefit from recent rate hikes, so I am pleased to see NS&I issuing new issuance of Guaranteed Growth Bonds and Guaranteed Investment Bonds at over 6 per cent – the highest rate since inception.
“For further security, the Treasury Department offers a 100 percent guarantee on these savings.”
Dax Harkins, CEO of NS&I, said, “It was great to be able to list our one-year fixed rate Guaranteed Growth Notes and Guaranteed Income Notes for sale again last February.”
“Today we are able to offer new issues with an improved interest rate for customers who want to know for sure how much they will earn from their savings over a year.”
“At the same time, existing customers with maturing bonds can choose to invest in two-, three- and five-year guaranteed growth bonds and guaranteed income bonds at new higher interest rates.”
Guaranteed Growth Bonds and Guaranteed Income Bonds are both taxable, unlike some NS&I products.
This means that savers must watch out for a violation of their personal savings allowance.
The PSA gives base rate taxpayers their first annual interest savings of £1,000 tax free. Higher rate taxpayers get £500 and additional rate taxpayers have no PSA.
Read more here: Will you face a tax burden on your savings as interest rates rise?