NS&I has announced a second increase in interest rates for eight of its fixed-rate savings accounts within two months. The Treasury-backed bank has boosted rates on its one, two, three, and five-year fixed-rate accounts, with some now paying over 5%.
This adjustment, effective from today, 6 October, applies to NS&I's British Savings Bonds, which include Guaranteed Growth Bonds and Guaranteed Income Bonds. Andrew Westhead, retail director at NS&I, stated that the rate increases are a response to shifts in the broader savings market.
The one-year Guaranteed Growth Bond rate has risen to 4.99% gross/AER, while the one-year Guaranteed Income Bond is now 4.88% gross/4.99% AER. Two-year bonds have increased to 5.07% gross/AER for Guaranteed Growth and 4.96% gross/5.07% AER for Guaranteed Income. Three-year bonds are now 5.10% gross/AER and 4.99% gross/5.10% AER respectively, and five-year bonds have reached 5.17% gross/AER and 5.06% gross/5.17% AER.
These changes position NS&I's British Savings Bonds competitively within the market. According to Moneyfacts, the one-year bonds are currently beaten by only one other provider, while the two-year deals are among the top four. The three and five-year bonds are ranked among the top three for interest rates in their respective categories.