Savings Interest Rates, Switch Offers and Guides for NS&I

Who they are

NS&I - National Savings and Investments - is a state-owned savings bank in the UK and an executive agency of HM Treasury. Originally established as the Post Office Savings Bank in 1861, it has a long history of funding the UK government. The core purpose has never really changed: NS&I gives people a safe place to put their money, and in turn it gives the government another way of raising the money needed for running the country. When you save with them, you are lending money to the government, who then give you interest on your money or, in the case of Premium Bonds, the chance to win cash prizes.

The big thing that sets NS&I apart from every other savings provider is the protection on offer. NS&I is the only UK savings provider that secures 100% of your savings above £120,000 - because it has the unique backing of HM Treasury. The FSCS limit that applies at ordinary banks simply does not come into play here. NS&I does not offer current accounts, credit cards, mortgages, or insurance - it is a savings-only operation, and that focus shows in its range.

Savings accounts

NS&I's line-up covers several distinct needs. For straightforward easy access, the Direct Saver pays 3.45% variable with instant access online or by phone, starting from just £1. Income Bonds offer the same 3.45% variable rate but pay interest monthly rather than annually - useful if you want a regular income stream - with a £500 minimum and no penalty for withdrawals.

On the ISA side, the Direct ISA pays 3.80% AER tax-free with instant access from £1. For children, the Junior ISA pays 3.70% AER tax-free, with the money locked until the child turns 18 and a £1 minimum to open.

If you are happy to lock money away, the Guaranteed Income Bonds range pays fixed rates across four terms: 4.72% over one year, 4.70% over two years, 4.68% over three years, and 4.75% over five years. All require a £500 minimum and no access until maturity. These are among the more competitive parts of the NS&I range right now.

Then there are Premium Bonds. The prize fund rate is 3.80%, with odds of 22,000 to 1 per £1 Bond each month, and all prizes are tax-free. You can start with £25 and cash in at any time. The key thing to understand is that 3.80% is not a guaranteed return - it is the average payout across all holders, heavily skewed by the large prizes. Whether you come close to that figure in practice depends entirely on luck. For higher and additional-rate taxpayers who have used up their Personal Savings Allowance, the tax-free angle can be genuinely valuable. For most basic-rate savers with modest balances, a straightforward savings account or Cash ISA will often deliver a more reliable result.

Is it right for you?

NS&I is worth serious consideration if absolute capital security matters to you - particularly if you are holding a large lump sum above the £85,000 FSCS limit that applies at ordinary banks. NS&I sets interest rates both to attract savers and provide low-cost finance for the government, and rules are in place to ensure that it does not offer market-leading products that would stifle competition - so its rates are generally competitive but rarely the very best on the market. Just because NS&I is backed by the government, it does not mean you will get better interest rates than other banks.

For most savers the choice comes down to this: if unbeatable security and a trusted government name are your priorities, NS&I is hard to argue with. If squeezing out the best possible guaranteed rate is the goal, it is worth comparing the full market first. The live rates on this page will show you exactly where NS&I stands right now.