NS&I has announced another issue of its Green Savings Bond with an increased interest rate of 5.70%. The move comes just weeks after NS&I announced an increase in the Premium Bonds notional interest rate which allows savers to get better returns on their prize fund account.
The NS&I Green Savings Bond was first introduced in October 2021 with an interest rate of just 0.65%. As of February 2023, the rate was 4.20% with the latest issue increasing it again to 5.70%.
Dax Harkins, NS&I Chief Executive, said: “I’m really pleased that we can offer a new Issue of our Green Savings Bonds at a higher rate from today. This is a great opportunity for savers who want to see a guaranteed return on their investment while also making a difference with their savings by helping to make the world greener, cleaner and more sustainable.”
In this article, we look at how the NS&I Green Savings Bond works as well as how it compares to other fixed-rate bond accounts.
What is the NS&I Green Savings Bond?
The Green Savings Bond guarantees a fixed rate of interest for a set period of time. It can be opened as both an individual or joint account and can only be managed online. Money invested in the NS&I Green Savings Bond is passed onto HM Treasury and is used as a contribution towards government spending. The money invested in a Green Savings Bond is specifically used towards green projects such as renewable energy growth, green transport development and pollution reduction. You can find information about how your money is making a difference, through the UK Government Green Financing Reports.
How does the NS&I Green Savings Bond work?
The NS&I Green Savings Bond is a 3-year fixed bond account which means that money deposited cannot be accessed for a minimum of 3 years. Throughout this term, the money will benefit from the 5.70% AER fixed rate of interest which is earned daily. Savers aged 16 and over can deposit money into the account and the bond can be opened online only at NS&I.com. If you are unable to access the online services, you are able to contact NS&I on 08085 007 007.
The minimum amount that can be deposited into the Green Savings Bond is £100 with the maximum amount that can be saved being £100,000. Once you have deposited your money into the account, it is no longer possible to deposit any additional funds nor is it possible to withdraw money from the account. There is, however, a 30-day grace period which means you can withdraw any money deposited into the account if you change your mind.
If you decide that you need access to your money within the 3-year term, the Green Savings Bond account with NS&I is not likely to be the most suitable.
Alternatives to the NS&I Green Savings Bond
While the NS&I Green Savings Bond offers a generous interest rate in the green space, it is not currently the best rate of interest available on a fixed-rate bond in the market. At the time of writing the best rate of interest on a 3-year fixed rate bond is 6.05% with Recognise Bank but it does not offer the green benefits that the NS&I savings bond does. You can compare the best fixed-rate bonds in our best buy table and stay up to date with the best savings rates in our article, 'Best savings accounts in the UK'.