NS&I savings bonds reach 5.17% as competition grows

National Savings & Investments (NS&I) raised rates on its British Savings Bonds in the UK on 6 October, taking its five-year growth bond to 5.17%. The increase gives new customers and customers with maturing bonds higher fixed returns, but their money cannot be withdrawn before the chosen term ends.

The Guardian’s 10 October report places the increase within growing competition among savings providers. It also carries a warning from Moneyfactscompare.co.uk’s Rachel Springall that attractive offers can disappear once providers have attracted enough deposits. That concerns availability for new deposits, rather than a reduction in an agreed fixed rate.

What NS&I’s new bond rates pay

The one-year Guaranteed Growth Bond now pays 4.99%, up from 4.82%, while the two-year version pays 5.07%, compared with 4.81% previously. The three-year rate has risen from 4.83% to 5.10%, and the five-year rate from 4.85% to 5.17%. NS&I labels these rates gross and annual equivalent rate, or AER.

British Savings Bonds is the branding used for Guaranteed Growth Bonds and Guaranteed Income Bonds. For growth bonds, interest is added annually and paid when the bond matures. Income bonds pay interest monthly, so the two versions provide different payment schedules over the same available terms.

Money stays locked away until maturity

NS&I’s announcement sets a minimum investment of £500 and a maximum of £1 million per person in each issue. The new issues are available both to new customers and to customers whose existing bonds are maturing. These are fixed-term accounts without early withdrawals.

At the end of the term, customers can withdraw their money or reinvest in a new term. The announcement gives no closing date for the new issues. It therefore establishes the launch and terms, without setting a deadline for new applications.

How rival savings offers compare

Sarah Coles, AJ Bell’s head of personal finance, told the Guardian that “you can still make more money elsewhere”. At the time of its report, Union Bank of India (UK) offered a one-year fixed bond paying 5.12%, while GB Bank offered a five-year bond paying 5.37%. Those figures are the newspaper’s reporting snapshot.

Another provider had also raised its offer: the Guardian reported that Marcus by Goldman Sachs increased its one-year fixed savings rate during the week from 4.30% to 4.75%. That remained below NS&I’s new one-year growth rate in the reported comparison.

The report also described Starling’s Easy Saver offer of 5% on balances up to £25,000 for customers opening a current account on or after 1 October. It combines a 2.5% variable standard rate with a 2.5% fixed bonus lasting six months, and allows unlimited penalty-free withdrawals.

Earlier Starling current-account customers opening a new Easy Saver could receive 4%, including a 1.5% fixed bonus for six months, according to the Guardian. These conditional, partly variable offers differ from NS&I’s fixed-term bonds in both access and how long their headline rates apply.

Treasury backing and FSCS protection differ

NS&I says all money invested with it is secure and backed by HM Treasury. Its protection therefore differs from the standard compensation limit applying to eligible deposits at UK-authorised banks, building societies and credit unions.

The Financial Services Compensation Scheme says that standard limit has been £120,000 per eligible person, per authorised firm since 1 December 2025. It applies when a covered institution fails. Accounts at brands sharing a banking licence are counted together, rather than receiving a separate limit for each account or brand.

There is also protection for qualifying temporary high balances of up to £1.4 million for up to six months. FSCS identifies house sales and inheritances among the circumstances that can qualify. This exception matters when comparing protection for large lump sums: £120,000 is not the ceiling in every case.

No announced deadline for the new issues

NS&I retail director Andrew Westhead described the increases as “responding to changes in the wider market”. The organisation says they will help it meet its financing target. Springall’s warning describes why savings products can leave the market; it does not establish an imminent withdrawal of these particular bonds.