- New NS&I three-year British Savings Bonds will be launched in early April
- Rate the bond will offer has not yet been confirmed
The Chancellor announced in the Budget that National Savings and Investments will unleash new British Savings Bonds next month.
The bonds will have a three-year fixed term and NS&I confirmed that they will be on sale from early April.
The interest rate has not been announced yet but are NS&I said it intends them to be priced ‘mid-market in relation to similar products.’
Buy British: NS&I will launch new three-year fixed-rate British Savings Bonds in early April
British Savings Bonds will be new three-year fixed-rate Issues of NS&I’s Guaranteed Growth Bonds and Guaranteed Income Bonds, which were last on sale in 2019.
They will offer savers a guaranteed rate over three years for investments between £500 and £1million.
Money put in the bonds will be ‘invested back into supporting the UK’ NS&I said, although no clearer details are currently on offer.
Along with the three-year fixed-rate bond, the Chancellor announced that NS&I will have a net financing target of £9billion for 2024-25, with generous wiggle room of plus or minus £4billion.
The British Savings Bonds will be included in this target – but Green Bonds will not be as they sit outside the net financing target.
This is £1.5billion more than last year’s net financing target of £7.5billion, which had an allowance of plus of minus £3billion, although it is currently ahead of this sum, at £10.9billion
NS&I already has three-year fixed-rate bonds in its Green Savings Bonds which pay 2.95 per cent.
Given how low this rate is, having been slashed twice from 5.7 per cent in August 2023, it is anticipated that the rate on the British Savings Bonds will be more attractive in order to garner interest from savers for such a niche term on a product.
Money invested in Green Savings Bonds goes towards projects such as making transport greener, using renewable energy over fossil fuels, preventing pollution, using energy more efficiently, protecting natural resources and adapting to a changing climate.
Mark Hicks, head of Active Savings at Hargreaves Lansdown, said: ‘The savings landscape has a new British landmark, with a British Savings Bond from NS&I, which will offer a guaranteed savings rate over three years.
‘All eyes will be on the rate available, because even savers who want to buy British with their cash will not want to accept a disappointing rate in return.’
The best three-year fixed-rate bond on This is Money’s independent savings tables pays 4.65 and is offered by Hampshire Trust bank. Savers can still get more than 5 per cent on one-year fixed rates.
Hicks adds: ‘With the Bank of England set to cut rates in the coming months, savers will need to think carefully whether they want to wait for this bond – with no certainty about the return on offer, or fix now, while they can still secure a great rate.
‘It’s also worth noting that most savers are currently choosing easy access and shorter-term fixed rates.
‘Given this is a three-year bond, it will need to be a very attractive rate to inspire much interest from savers.’
