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NS&I launches 'British Savings Bonds' – but you can get better rates elsewhere

NS&I has launched its 'British Savings Bonds' – three-year fixed rate savings accounts first announced by the Chancellor in his Spring Budget last month. But they'll only pay 4.15% AER – a rate you can easily beat elsewhere. 

Despite the new branding, there's nothing revolutionary about these accounts. NS&I says your savings will be "invested back into supporting the UK" – but, as NS&I itself points out, this is the case for ALL of its account types (including Premium Bonds).

That's because whenever you save with NS&I, you're effectively lending your money to the Government – and the funds raised by the new bonds aren't being ring-fenced for a specific use.

How NS&I's British Savings Bonds work

Here are the key need-to-knows:

  • You can deposit from £500 up to £1 million. As with all NS&I savings, every penny you put in is totally safe, as it's backed by the Treasury. This is one of NS&I's main draws – it won't go bust unless the UK Government does. Though, under the savings safety rules, all UK-regulated savings accounts are protected anyway up to £85,000 per person, per institution.

  • The 4.15% AER interest rate is fixed for three years. However, as noted above, you can easily beat this rate with other savings.

  • You can't withdraw your money until the end of the three-year term. So only lock away what you definitely won't need access to.

  • You can choose when to have the interest paid. The Guaranteed Income Bonds pay interest monthly, while the Guaranteed Growth Bonds pay interest at maturity. But be aware: depending on your circumstances, choosing to have the interest paid in one go at maturity could mean you end up paying more tax. Unlike NS&I's Premium Bonds, where any prizes you win are tax-free, interest you earn from British Savings Bonds IS taxable. 

You can earn more on your savings elsewhere

As shown in the table below, the British Savings Bonds can be beaten even by shorter-term fixes, as well as easy-access accounts, which allow you to make withdrawals. So the bonds are only really worth considering if you have very large amounts to save (above the £85,000 per person, per institution protection you get with other UK-regulated accounts) and want the total safety you get with NS&I.

Here's how the British Savings Bonds stack up compared to other savings accounts:

Account type Top available rate (AER) and provider Annual interest earned per £1,000 saved (1)
British Savings Bonds



Premium Bonds

4.4% 'prize rate'


N/A – what you get is decided by a monthly draw. For full info, see our 'Are Premium Bonds worth it?' guide.


Bank of London via Flagstone

£50.20 (£8.70 more)
Six-month fix


SmartSave via Saga

£51.90 (£10.40 more)
One-year fix



£51.70 (£10.20 more)
Two-year fix


Beehive Money / DF Capital

£50.70 (£9.20 more)
Three-year fix



£47.10 (£5.60 more)

(1) Figures are estimates based on interest being paid once per year, not compounding. | Information correct as at 16 April 2024. For the latest rates, see our regularly-updated Top savings accounts guide.

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