NS&I ‘hack away’ interest rate on new fixed savings account | Personal Finance | Finance

NS&I has today issued a new issue of its Green Savings Bonds paying 3.95 per cent gross fixed rate/AER over three years.

Launching in 2021, the Bonds are used alongside gilts to raise money for green projects as part of the UK Government’s Green Financing Framework.

The minimum investment in Green Savings Bonds is £100, with a maximum limit of £100,000 per person for each Issue. Investors must be 16 years of age or older to purchase the Bonds, and the full amount deposited will be held for three years and cannot be withdrawn during that time.

However, Myron Jobson, senior personal finance analyst, Interactive Investor, pointed out that the new rate is significantly lower than what was previously available. In August the Government backed account was offering 5.7 per cent.

He said: “The NS&I, with its Green Savings Bonds, which use savings money to fund green infrastructure projects, have again achieved savings rates, which feels like a sharp end to this time.

“The news comes just over a month after the Government-backed bank pulled its popular and market-leading one-year fixed rate accounts.

“It is clear that the bank, which is supported by the Government, is wary of the impact of its competing savings products on the market on the bottom line.”

Rachel Springall, financial expert at Moneyfactscompare.co.uk Express.co.uk said: “This latest deal from NS&I is likely to be an attractive option for savers willing to lock up their money for three years. However, the rate can be beaten by alternative brands, including a deal from Gatehouse Bank which pays 5.5 per cent, as an expected rate of profit, which is a Woodland Saver.”

With Woodland Saver, a new tree is planted in a UK woodland for every bank account opened or renewed. Ms Springall continued: “The market-leading three-year fixed rate comes from JN Bank which pays 5.9 per cent gross.”

A three-year JN Bank arrangement can be opened with a minimum deposit of £1,000 and interest is paid annually.

Ms Springall added: “It will be interesting to see the demand this band receives from savers, as NS&I is such a trusted brand.”

As at 31 March 2023, over £915 million has been invested in Green Savings Bonds, compared to £288 million at the same point the previous year.

Mr Jobson said the best savings deals were “dropping like flies” following the Bank of England’s decision to keep interest rates at 5.25 per cent after 14 consecutive Base Rate hikes.

He added: “The prevailing view among economists is that interest rates are at a peak. If this is the case, the best savings deals won’t be around for long. Therefore, savers should act quickly to get the best deals while they can.

“Those who can afford to put money away for five years or more [could] consider investing for returns that beat inflation that beat savings rates

“Investing can be volatile from day to day and while the potential for greater returns from the stock market carries an inevitable risk, taking a long-term view can smooth out some of those highs and lows and benefit get rid of long term potential that comes with this approach. But everyone also needs a low risk buffer.”

Denial of responsibility! vismuseum.org.in is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – at loginhelponline@gmail.com The content will be deleted within 24 hours.

Read original article here

Leave a Comment