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09 Sept 2025
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09 Sept 2025
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Savings giant NS&I has launched some new versions of its British Savings Bonds with lower rates than those previously offered.
The provider said the announcement is in response to changes in the wider market.
British Savings Bonds are fixed-term issues of NS&I’s Guaranteed Growth Bonds and Guaranteed Income Bonds.
Guaranteed Growth Bonds are a lump sum investment that earns a fixed rate of interest over a set period of time.
Interest is added to the bond on each anniversary of the investment.
Guaranteed Income Bonds are also a lump sum investment and they pay out a monthly income at a fixed rate of interest over a set period of time.
NS&I’s new two-year Guaranteed Growth Bonds and Guaranteed Income Bonds have a rate of 3.85% AER (annual equivalent rate). The previous rate was 4.00%.
Its new three-year Guaranteed Growth Bonds and Guaranteed Income Bonds will pay 3.88% AER. The previous rate was 4.10%.
The new five-year Guaranteed Growth Bonds and Guaranteed Income Bonds will pay 3.84% AER. The previous rate offered was 4.06%.
The new versions went on sale from Thursday.
There is no change to one-year British Savings Bonds.
The one-year Growth and Income options remain at 4.05% AER.
NS&I is also lowering the rate on a Junior Isa from July 18, from 4.00% to 3.55%.
Andrew Westhead, NS&I retail director, said: “Today’s announcement is in response to changes in the wider market and will ensure we continue to offer a range of fixed-term options while balancing the interests of savers, taxpayers and the broader financial services sector.
“This is the first change to our Junior Isa interest rate in nearly two years, reflecting our ongoing commitment to helping young people save for their future.”
Further Bank of England base rate cuts are expected in the months ahead, which could be a further blow for savers’ rates.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “These new rates show tougher times ahead for savers with interest rates starting to slide on these new savings bonds.”
She added: “However, there remains strong appeal to these products, and they will remain popular with savers with large amounts of savings.”
NS&I is backed by the Treasury, so money held with it has 100% security.
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