NS&I: a welcome boost, but still lagging behind the market leaders

National Savings & Investments (NS&I) has raised interest rates across its range of Guaranteed Income Bonds and Guaranteed Growth Bonds – collectively known as their British Savings Bonds. And for the first time in over 15 years, all four bond terms: 1, 2, 3, and 5 years are available to both new and existing customers.

This move is presumably a response to the government's decision in the Spring Budget to raise NS&I’s net financing target for 2024–25, from £9 billion in the previous tax year, to £12 billion in 2025-26. A notable 33% increase.

The net financing target is the amount of money NS&I needs to raise from savers, allowing for any customer withdrawals and money paid out as Premium Bond prizes. With a higher fundraising target, it’s not surprising that NS&I is stepping up efforts to attract savers’ money – good news for savers.

What’s changed?

NS&I has made moderate but welcome improvements to its fixed-term savings products. Here’s how the rates compare before and after the latest update:

Source: NS&I, 2025

However, even with these new rates, better returns can still be found elsewhere -  particularly if you're happy to look beyond the high-street names and explore the wider savings market.

For example, Cynergy Bank is paying 4.65% on its 1-year Fixed Rate Bond – on a deposit of £50,000 there’s a difference of earning £2,325 (before the deduction of tax) or £2,025 with NS&I.

Take a look at our Best Buy tables for all the current top rates.

Over longer periods, this adds up significantly.  

With the top 5-year bond on the market paying 4.56% (Secure Trust Bank) a deposit of £50,000 would provide interest of £250 more each year than it would with NS&I – and if you were to roll over and compound that interest, you could miss out on nearly £1,500 over the term. Not a trivial amount.

Why the rate hikes now?

Considering that the markets are anticipating a base rate cut at next Bank of England MPC meeting, this is an interesting move from NS&I.  

NS&I generally relies on its trusted name and government backing to attract savers, as its rates are rarely market leading. However, the revised net financing target, set by the Treasury not NS&I itself, is likely to be the driving force of this decision. Essentially, NS&I is tasked with helping to raise money for the government, directly from savers. When the target increases, as it has now, NS&I need to raise its rates to become more attractive.

Although not offering top rates, NS&I products offer a unique advantage that any funds deposited are 100% backed by HM Treasury, not limited to the Financial Services Compensation Scheme’s (FSCS) usual £85,000 limit per person, per institution. And savers can deposit up to £1m into each issue of the British Savings Bonds – and more still into the easy access accounts. This security is unmatched and gives real peace of mind, especially for those with large sums to put away.

It’s all about what matters most to you. If absolute security is your priority and you have a large cash holding, NS&I is a useful option. But if maximising your return is the aim, and you're willing to split your savings between different providers, keeping within the FSCS limit of £85,000 per institution, there are certainly stronger rates out there.

For those with larger amounts of cash, the rise of cash savings platforms has added a simple and flexible way to get more from your savings.  

Think of them like a supermarket for savings, offering a range of competitive accounts from different banks, all accessible through a single application and login. Whether you’re after easy access or fixed-term options, these platforms do often offer competitive and sometimes even market-leading and exclusive products even if they’re not whole of the market.  

Perhaps most importantly, they make it easier to spread your savings across multiple banks, helping you stay within FSCS protection limits while keeping your money working harder.  

With our Savers Hub, powered by Insignis, you can now open, manage and switch between accounts all in one place bringing ease and efficiency to managing your savings.

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This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.

The Financial Conduct Authority (FCA) does not regulate cash advice.