NS&I Raises Green Savings Bonds Rate to 4.73 Percent

UK savers can now earn a higher return through a new issue of Green Savings Bonds from National Savings and Investments (NS&I), the Treasury-backed savings provider. The three-year bonds pay 4.73% AER, up from 4.45% previously, and help fund government environmental projects across the United Kingdom.

According to NS&I, investors can deposit a minimum of £100 and a maximum of £100,000 per person for each issue. Applicants must be at least 16 years old, and their money remains locked in for the full three-year term, with no withdrawals permitted during that period.

NS&I introduced Green Savings Bonds in 2021 to allow savers to support government-backed environmental initiatives while receiving a guaranteed return. The bonds operate separately from the institution's annual net financing target, which the Treasury sets each year.

Andrew Westhead, NS&I's retail director, said the product combines a fixed return with support for environmental investment.

"Green Savings Bonds provide savers with guaranteed returns while supporting green government projects across the UK." Westhead said.

The rate increase comes as savers have more opportunities to secure competitive returns elsewhere in the market. Sarah Coles, head of personal finance at AJ Bell, said the bonds had struggled to keep pace with the wider rise in savings rates.

Coles described the effect of changing market conditions on the product's competitiveness.

"Today's rise still puts these products some way behind the NS&I British Savings Bonds, offering 5.1% over this period." Coles said.

Coles also noted that rising savings rates had been "leaving Green Savings Bonds in the dust". The comparison highlights the gap between the new 4.73% rate and the 5.1% offered by NS&I British Savings Bonds over the same period, according to her assessment.