NS&I

Who they are

NS&I's story began in 1861, when it was originally known as the Post Office Savings Bank - though it has long since moved on from those Post Office roots. The name was changed to National Savings and Investments in 2002. Today it sits in a category entirely its own: NS&I is the UK government savings bank, and the only savings provider that secures 100% of your savings, as it is backed by HM Treasury. There is no FSCS cap to worry about - the government guarantee is unlimited.

NS&I has no shareholders. As it is part of the government, the largest stakeholder is the UK taxpayer. Funds from NS&I have historically been a relatively cheap source of government borrowing, and NS&I sets interest rates both to attract savers and to provide low-cost finance for the government. That dual purpose matters: rates here are set with an eye on not distorting the market, which means NS&I rarely sits at the very top of any best-buy table. It does not offer current accounts, credit cards, mortgages or insurance - savings is all it does.

Savings accounts

The product most people associate with NS&I is Premium Bonds. Premium Bonds are the most popular product: instead of paying interest, NS&I runs a monthly prize draw where bondholders can win tax-free prizes ranging from £25 to £1 million. You can hold between £25 and £50,000, and your capital is fully secure throughout.

It is worth being clear-eyed about how the prize draw actually works, though. NS&I publishes an annual prize fund rate, but this is not an interest rate - it is the average payout across all bondholders, heavily skewed by the large prizes. Most people with typical balances will see returns that fall well short of that headline figure, and a large proportion of holders win nothing in any given month. Premium Bonds make most sense for higher and additional-rate taxpayers who have already used their ISA allowance and Personal Savings Allowance, since any prizes won are always tax-free regardless of your tax band.

Beyond Premium Bonds, NS&I currently offers a Junior ISA paying 3.70% AER (variable), with a minimum balance of just £1. The money is locked until the child turns 18. Like all NS&I products, it carries the full HM Treasury guarantee with no upper limit on protection - which sets it apart from Junior ISAs held elsewhere, where FSCS rules apply instead. Rates on all NS&I products are variable and can change, so the live figures shown on this page reflect the current position.

Is it right for you?

NS&I is genuinely hard to compare to an ordinary bank or building society, because it occupies a different space. The unlimited government guarantee is real and meaningful - particularly for anyone holding a large lump sum (from a house sale, for instance) who wants complete peace of mind without splitting money across multiple institutions.

For families opening a Junior ISA, NS&I's 3.70% AER option is a straightforward, fully online product with unmatched security. Whether it is the best rate available at any given moment is a separate question - the market is competitive and rates shift regularly.

Where NS&I tends to underwhelm is on pure rate competition. NS&I tends to lag behind the rest of the market on standard savings products, and there is no switching bonus or introductory deal to factor in. If maximising guaranteed interest is your priority, it is always worth comparing NS&I's current rates against the broader market before committing.

Check the live rates shown on this page to see exactly where NS&I sits today relative to other providers.