National Savings & Investments (NS&I) has increased the interest rates on its range of fixed-term savings bonds, with the top rate now reaching 4.50% AER. The government-backed provider has launched improved rates across both its Guaranteed Growth and Guaranteed Income Bonds (often marketed as British Savings Bonds). The accounts allow savers to lock in a guaranteed return for one, two, three, or five years. The rate hike means NS&I now offers some of the most competitive fixed-rate savings products in the market, with rates that challenge those of some of the biggest high street banks.
What are the new NS&I fixed-rate bonds?
When opening a fixed bond with NS&I, savers must choose between a Guaranteed Growth Bond or a Guaranteed Income Bond, depending on how they wish to receive their interest. Savers can open either account with a minimum deposit of £500, up to a maximum of £1 million. The primary draw of NS&I is that it is backed by HM Treasury. This means that 100% of the deposited funds are secure, which can be an attractive feature for those looking to save large sums in a single place without spreading them across multiple institutions. Increased rates are now available across all of its fixed-term options, summarised below.
Guaranteed Growth Bonds
These pay interest annually. The interest is added to the bond itself and cannot be accessed until the bond matures at the end of the fixed term.
- One-year bond - 4.50% AER (Up from 4.07%)
- Two-year bond - 4.48% AER (Up from 3.98%)
- Three-year bond - 4.45% AER (Up from 4.02%)
- Five-year bond - 4.40% AER (Up from 4.05%)
Guaranteed Income Bonds
These pay interest on a monthly basis directly into a nominated current account, providing a regular income stream. Because the interest is paid out rather than compounded, the monthly 'gross' rate looks slightly lower, but the overall annual equivalent rate (AER) is identical to the growth bonds for easy comparison:
- One-year bond - 4.50% AER (4.41% gross)
- Two-year bond - 4.48% AER (4.40% gross)
- Three-year bond - 4.45% AER (4.37% gross)
- Five-year bond - 4.40% AER (4.32% gross)
How do the rates compare to the rest of the market?
While the new NS&I rates are highly competitive, especially when compared against traditional high street banks, they are not market-leading. There are a number of specialist providers and challenger banks that are currently offering slightly higher rates, with the top one-year fixed bond paying around 4.70% AER.
Market-leading fixed-rate savings - 1 - 5 Years
| Account Name | Provider | AER | Minimum opening balance | How to manage the account | How to apply |
Financial Services Compensation Scheme
|
| 1 Year Fixed Rate Bond | Meteor (Al Rayan) | 4.70% | £1,000 | Online | Online | Own Licence |
| 2 Year Fixed Rate Bond | Kent Reliance | 4.69% | £1,000 | Online | Online | Own Licence |
| 3 Year Fixed Rate Bond | Kent Reliance | 4.66% | £1,000 | Online | Online | Own Licence |
| 5 Year Fixed Rate Bond | Market Harborough | 4.70% | £5,000 | Online, Branch | Online, Branch | Own Licence |
Correct as at 08/05/2026
Savers looking to secure the highest possible return can compare all of the latest market-leading deals by visiting our article that lists the 'Best fixed-rate bonds in the UK'.
Things to consider before choosing a fixed-rate savings product
Before committing to a fixed-rate bond, it is important to understand the restrictions. Money placed in these accounts is locked away for the duration of the term. Withdrawals are not permitted until maturity, meaning these accounts are only suitable for funds that will not be needed for short-term expenses or emergencies. Additionally, unlike Premium Bonds, interest earned on NS&I fixed bonds is taxable. Depending on an individual's income tax band and their personal savings allowance, this could result in a tax liability.
For those unsure whether a fixed-term account is right for them, it is important to understand all the available options. You can learn more about the different choices by reading our article 'Best savings accounts in the UK'.
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