National Savings and Investments (NS&I) has quietly launched a new British Savings Bond, offering a substantial premium to its other products over a fixed one-year period.
The new one-year bond pays interest at 4.5%.
Rates of some of its savings products have also risen with the NS&I’s Income Bond and Direct Saver accounts now paying 4% AER (variable), up from 3.64%.
The bond is NS&I’s second fixed-rate bond with a three-year product announced in the spring Budget that pays 4.15% AER.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “Savings rates have crept up a little at NS&I. They’ve kept it quiet, given the general election, but they’re not much to shout about anyway. You can do so much better elsewhere.”
For some months, savers have been able to get ‘real interest’ on thier savings with rates on many accounts well above the current inflation rate of 2.3%, even for easy access accounts which allow limited withdrawals each year.
All money invested in NS&I accounts is guaranteed by the UK government.