Increase in Interest Rates for NS&I Savings Accounts - A Comparative Analysis
In a recent announcement, National Savings and Investments (NS&I) has raised the interest rate for new issues of its 1-year-fixed-term British Savings Bonds to 4.18%. This move comes alongside an increase in the interest rate for Guaranteed Growth Bonds, which now stands at 4.18%, up from 4.05% previously [1][2][3].
These government-backed bonds, with a minimum deposit of £500 and a maximum investment of £1 million, do not allow early withdrawal. They offer a competitive interest rate, albeit slightly lower than the highest rates available on the market [1][2].
As of July 2025, the new interest rates for NS&I's 1-year-fixed-term British Savings Bonds will take effect. The interest can be paid at the end or slightly lower for monthly payouts, with a gross rate of 4.11% and an AER of 4.18% for the Guaranteed Growth Bonds, and 4.11% gross and 4.18% AER for the Guaranteed Income Bonds [1][2][3].
While the rates offered by NS&I are competitive, they are not the highest on the market. Financial experts suggest that some commercial banks or building societies might offer one-year fixed savings accounts with rates higher than 4.18% AER [3]. However, the security provided by NS&I, with its 100% government guarantee, sets it apart from many commercial savings accounts.
For those seeking the highest interest rates, it is recommended to regularly check live savings rate tables from providers like Moneyfacts or similar, as rates fluctuate regularly. As of the current market, the best one-year fixed savings account, offered by AlRayan Bank, boasts an interest rate of 4.6% [4].
NS&I's Retail Director, Andrew Westhead, stated that the new opportunity to save will be good news for savers [4]. With these changes, NS&I continues to provide a safe and competitive savings option for individuals looking to secure their funds while earning a reasonable return.
[1] NS&I (2025). One-year fixed bonds: Guaranteed Growth and Income Bonds. [Online] Available at: https://www.nsandi.com/products/bonds/fixed-term/one-year-bonds
[2] Moneyfacts (2025). NS&I hikes one-year bond rates. [Online] Available at: https://www.moneyfacts.co.uk/news/savings/nsi-hikes-one-year-bond-rates/
[3] AJ Bell (2025). NS&I's one-year bond rate hike not leading the pack. [Online] Available at: https://www.ajbellmedia.co.uk/news/nsis-one-year-bond-rate-hike-not-leading-the-pack/
[4] AlRayan Bank (2025). One-year Fixed Saver. [Online] Available at: https://www.alrayanbank.co.uk/savings/one-year-fixed-saver/
- For individuals focused on personal finance, the current interest rates for National Savings and Investments (NS&I) 1-year-fixed-term British Savings Bonds provide a competitive option with a return of 4.18%.
- Despite the increased interest rates, the interest offered by NS&I's 1-year-fixed-term British Savings Bonds is slightly lower than the highest rates available in the market, demonstrating the importance of regularly checking live savings rate tables from providers like Moneyfacts.
- Businesses looking to invest their savings may find higher rates with some commercial banks or building societies, but the security provided by NS&I with its 100% government guarantee sets it apart from many commercial savings accounts.
- By offering competitive interest rates while providing a safe environment for savings, NS&I continues to be a significant player in personal-finance, providing opportunities for individuals to secure their funds and earn a reasonable return.
