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Why is NS&I so popular?

National Savings & Investments (NS&I) is considered by many to be a National Treasure. One reason for this is simply the longevity of NS&I. It’s been around for over 160 years. And over time, NS&I has offered a number of different products, some of which are competitive and others that are not.

Some of which however could not be found anywhere else, like the Index Linked Certificates, which has given NS&I an edge (although these are no longer on sale).

But probably the main benefit, is the unique deposit protection that you have on all cash held with them as they are guaranteed by the Government.
For example, NS&I Direct Saver has a maximum deposit limit of £2 million per person – if you deposit that much, it is all protected by HM Treasury, unlike a bank or building society where a maximum of £85,000 per person, per banking licence is protected by the Financial Services Compensation Scheme (FSCS)

This is something other providers simply can’t compete with. NS&I is supposed to bear this in mind and rarely will its products be the best in the market – although it is not unheard of.

As it’s rare for NS&I products to pay top rates, you could earn more interest by depositing no more than £85,000 with one or more providers, so that the money is earning the best rates possible from the whole of the market, while still remaining safe.

However, if you have £2million you might not relish the thought of opening 24 different accounts, so NS&I might be a good option for at least some of the money – even if it means not earning the very best interest.

And in recent years, there have been many changes to the accounts available and for many, NS&I no longer offers the safe haven for their cash that it once did.

So, savers with large sums of money to keep in cash face a tough decision if NS&I is no longer the right option.
A number of NS&I accounts are hard to compare with the market as standard providers don’t have the unique structuring of the products, such as Premium Bonds (still available) and Index Linked Certificates (no longer on sale).

However, with the accounts that are comparable, it’s unusual to see NS&I products top the best buy tables – so there are usually competitive alternatives that can be considered.

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Products available

Premium Bonds

Premium Bonds are an old favourite - but more of a lottery than a savings account. However, unlike the lottery you won’t lose your original capital and you might just win a big prize.

Every £1 you invest into Premium Bonds, buys you a unique Bond number with an equal chance of winning a monthly draw prize of between £25 and £1million – although there are only two £1million prizes per month. There is no guarantee that you’ll win a prize – but anything you do win is tax free.

The current odds of winning anything are 21,000 to 1, with the annual prize fund interest rate (not guaranteed of course) currently at 4.40%.

The added bonus is the prizes are tax-free. Savers can invest from £25 up to a maximum £50,000.

Not all NS&I products are tax free, so check the terms and conditions carefully to make sure you know what tax you might need to pay.

Green Savings Bond


This was a new product, introduced in October 2021. It is a 3-year bond, similar to the Guaranteed Growth Bond, as there is no option for any income – the proceeds including compounded interest, are all paid on maturity and there is no option to close the bond beforehand.

The difference is that the maximum deposit is £100,000 (the minimum is £100) and the money raised is to go towards helping finance the Government’s green spending projects. So, as NS&I states, “You’ll be saving while helping to make the world greener, cleaner and more sustainable.”

The six key areas the Government are planning to spend the money on are:

  • Making transport cleaner
  • Renewable energy over fossil fuels
  • Preventing pollution
  • Using energy in a more efficient way
  • Protecting natural resources
  • Adapting to a changing climate

The current Issue – issue 7 – is paying 2.95% AER and as there is no option to take the interest out annually or monthly, the interest is all deemed to be received in the year of maturity, rather than being spread over the term of the bond.

Income bonds

Unlike the Guaranteed Income Bonds, the Income Bonds account is a monthly income paying variable rate easy access account. Currently paying 3.59% gross/3.65% AER on a minimum of £500 up to a maximum of £1m.

Direct Saver

An easy access, taxable savings account available online or by phone. The account pays 3.65% gross/AER on balances of £1 to £2m.

Direct ISA

An easy access Cash ISA available online or by phone. The account pays 3% tax-free/AER, available on a minimum of £1.

Investment account

An easy access, taxable savings account available by post – but this account is no longer marketed and the rate is poor – just 1% gross/AER.

Again, the maximum in this account is £1m and like all of the above, any money deposited is guaranteed by HMRC.

Junior ISA

A tax free children’s savings account available for those under the age of 18 with current limits set at £9,000 for this tax year. The current rate is 4% tax-free/AER.

Products you may already have

NS&I also has some products that are no longer on sale to new customers, but if you already have them, you can roll them over on maturity.

NS&I index linked certificates

If you are lucky enough to have some of these, you should think carefully before encashing them.

These accounts are some of the only savings accounts that can beat inflation, as they index link to the Consumer Prices Index (CPI).

Index Linked Certificates opened before 1st May 2019 are even more valuable as they still use the higher Retail Prices Index (RPI).

The change from RPI to CPI did not go down well with customers and the media alike, even though CPI is the more widely used inflation measure and is applied to index linked products such as state benefits.

But the returns are tax free – so even with this change, they are especially valuable to taxpayers who are earning more interest than the Personal Savings Allowance (PSA) that applies to them. 

Even though you can’t currently add any new money, you can renew up to the total value of your maturing Certificate, including all the interest and index-linking earned. You won’t be able to add any extra money to your Certificate.

The options on maturity will normally include:

  • renewing your Certificate for another term of the same length
  • renewing it for a term of a different length (only 3-year and 5-year terms available
  • cashing it in

Guaranteed Income and Guaranteed Growth Bonds

These are straightforward taxable fixed rate bonds, and in the past, you were able to open bonds with a term of 1-year, 2-years, 3-years and 5-years. And you could deposit up to £1m per person into each issue.

However, in 2018 this maximum deposit was slashed to £10,000 and just over a year later the bonds were all withdrawn from sale completely.
The 1-year bonds were reintroduced in February 2023 with the maximum returned to £1m per person but once again they have been withdrawn from sale - so new customers can no longer access these bonds.

The Guaranteed Income Bond pays an income out on a monthly basis, while the Growth Bonds do not produce any income at all – the deposit plus compounded interest is all paid on maturity.

One important thing to be aware of with the Guaranteed Growth Bonds is that as there is no option to take an income at all, all the interest earned will count towards your taxable income in the year the bond matures, rather than being spread out over the term of the bond, even though interest is compounded each year. With many other bonds, if you at least have the option to choose to have the interest paid out or compounded, the interest is deemed to be paid annually and therefore should be added to your taxable income each year. So, savers need to be aware that with interest rates so much higher these days, they could breach the £1,000 Personal Savings Allowance (PSA) with as little as £7,500 depending on the bond chosen.

The PSA was introduced in April 2016 and it means that basic rate taxpayers can earn up to £1,000 per tax year, before they have to pay tax on the interest on their cash savings accounts. The PSA for higher rate taxpayers is £500 and additional rate taxpayers don’t receive a PSA.

However, you cannot roll over any unused PSA, so if you don’t earn £1,000 in savings interest in one year, but you earn more than the allowance in the following year, that’s tough luck. You’ll still owe tax on any interest over the allowance for that individual tax year.

And with all the interest being deemed to have been received in the year of maturity, it’s more likely that many will pay far more tax on their savings than they should in that final year and some could even be pushed into a higher (or even worse, the highest) tax bracket for that year. If you were to deposit £100,000 into the current issue of the 2-year bond paying 5.80%, you will receive interest of £11,936.64 on maturity, which will be added to your taxable income at that point.

This also could cause someone with taxable income of between £100,000 and £125,140 to suffer a whopping 60% tax rate (yes! 60%). Read our article for more information about your allowances.

So, the current situation with these Guaranteed Income and Guaranteed Growth Bonds is that with the exception of the 1-year Bond, no new savers can invest, although those who already hold an old issue, do have the choice of rolling over or taking the proceeds on maturity.

For those considering rolling over maturing proceeds, better rates can often be found elsewhere (although this isn’t always the case, so shop around) – however for those with large holdings if they move elsewhere, they may need to split the money if they want to ensure it continues to be fully protected by the UK FSCS.

You can renew up to the total value of your maturing bond, including all interest earned. Or you can cash in some of your investment and renew the balance – but you won’t be able to add any extra money.

The options on maturity will normally include:

  • renewing your bond for another term of the same length
  • renewing it for a term of a different length
  • cashing it in

The current rates available for customers who wish to roll over an existing bond are as follows;


Guaranteed Income Bonds

Issue 761-Year4.07% gross/4.15% AER
Issue 66  2-Year3.78% gross/3.85% AER
Issue 693-Year 3.40% gross/3.45% AER
Issue 615-Year3.11% gross/3.15% AER 


Guaranteed Growth Bonds

Issue 76 1-Year  4.15% gross/AER
Issue 662-Year3.85% gross/AER
Issue 693-Year3.45% gross/AER
Issue 615-Year3.15% gross/AER 

These issues and rates may change, so check any details sent by NS&I. 

Fixed interest savings certificates

As the name suggests, Fixed Interest Savings Certificates pay a fixed rate of interest for a fixed term. 

The real benefit of these certificates is that all interest earned is free from UK income or Capital Gains Tax.

You can renew up to the total value of your maturing Certificate, including all interest earned. Or you can cash in some of your investment and renew the balance – but you won’t be able to add any extra money to your Certificate.

The options on maturity will normally include:

  • renewing your Certificate for another term of the same length
  • renewing it for a term of a different length
  • cashing it in

The current rates available for customers who wish to roll over an existing Certificate are as follows:

Issue 602-Year4.00% tax free/AER
Issue 1105-Year4.05% tax free/AER 

These issues and rates may change, so check any details sent by NS&I. 

Products no longer available for any savers

65+ Guaranteed growth bonds

Perhaps the most interesting development from NS&I in recent years was the launch of the 65+ Guaranteed Growth Bonds, often referred to as ‘Pensioner Bonds’ in the media.

Available for either one or three years, the rates on offer were far in excess of the competition at the time.

Each saver over 65 could put up to £10,000 into each term and the accounts proved extremely popular.

Unfortunately, the options on offer from NS&I on maturity were disappointing in comparison to the original rates and so many other providers will have seen an influx of funds, as these accounts matured.

Investment Guaranteed Growth Bond

In a similar vein, 2017 saw the release of a new 3 year Investment Guaranteed Growth Bond from NS&I.

Like the so-called Pensioner Bonds before it, this new bond was set to be a market-leading interest rate and designed to help savers who continue to struggle with low interest rates.

Unlike Pensioner Bonds, this bond could be opened by anyone over the age of 16, so had far more of a reach and was available to open for 12 months from launch.

Unfortunately, whilst the rate was ahead of the competition at launch, the reception was muted overall, thanks largely to the relatively low maximum balance of £3,000.

Children’s bonds

These were taken off general sale on 26th April 2018 and once they mature, they can no longer be renewed.  

The Children’s Bonds were lump sum bonds offering a fixed rate for five years on deposits of up to £3,000 per child, per issue.

So those who currently hold these bonds will have to look at what options they are offered at maturity – but it’s unlikely they will be able to open a new Children’s Bond, unless this product is reintroduced.

Other NS&I products

The first account to be launched by the Post Office Savings Bank in 1861 was called the Ordinary Savings Account – this has been completely closed and all funds that remained were transferred into the NS&I Residual Account which is currently paying just 0.25%.

Other products that have been and gone included the Treasurer’s Account, SAYE, Yearly Plan and Deposit Bonds. As with the Ordinary Account all proceeds were transferred to the Residual Account when the accounts were permanently closed.

It definitely makes sense to check if you have some old NS&I accounts that have been neglected or forgotten, as if they have matured and/or moved, you could have cash sitting in the Residual Account earning a pittance.

In Premium Bonds alone there is more than £80 million prizes that currently remain unclaimed.

Premium Bonds may go unclaimed for reasons including if NS&I don’t hold your current address details or if you had Bonds bought as a child but have since forgotten about them.

NS&I has a Tracing Service for those who think they may have savings, but have lost the details.

Even if you haven’t forgotten your accounts, if you haven’t reviewed to see  if you could do better elsewhere, take a look at what is available from the open market.

NS&I is loved by many, but it doesn't offer as much opportunity as it once did. you can explore more about this in our article NS&I alternatives

If you want to get more information about how to manage your cash savings, get in touch and speak to a financial adviser who can help you.

The Financial Conduct Authority (FCA) does not regulate advice in respect of deposit accounts. 

Rates correct at 14/02/2024.