NS&I boosts Green Savings Bonds rate to pay 5.7% interest
- Previous issue of the three-year fix paid 4.2%
- Money invested in Green Saving Bonds helps finance green projects
- NS&I says £915m have been saved into them in last two years
National Savings and Investments has launched a new issue of its Green Savings Bonds, paying a rate of 5.7 per cent over three years.
The boost is a massive hike from when the product first launched in October 2021, when it paid just 0.65 per cent. The last issue paid 4.2 per cent – so this is a 1.5 percentage point bump.
The minimum investment in Green Savings Bonds is £100 with a maximum limit of £100,000 per person per Issue.
NS&I says money saved in the bonds fund projects such as making transport greener, using renewable energy over fossil fuels, preventing pollution, using energy more efficiently, protecting natural resources and adapting to a changing climate.
Greener savings: NS&I’s new issue of Green Savings Bonds pays a rate of 5.7% and cash is used to pay for green government infrastructure projects.
Investors need to be aged 16 or over to purchase Green Savings Bonds from NS&I.
The new issue fires the green up the best buy fixed-rate bonds, jumping 50 places up the list from the previous issue.
Dax Harkins, NS&I chief executive, says: ‘I’m really pleased that we can offer a new Issue of our Green Savings Bonds at a higher rate from today.
‘This is a great opportunity for savers who want to see a guaranteed return on their investment while also making a difference with their savings by helping to make the world greener, cleaner and more sustainable.’
How does it stack up to the best buys?
The best savings bond offered on a three-year fixed term is currently offered by Recognise Bank with a rate of 6.05 per cent. This account has a minimum deposit of £1,000 and a £85,000 maximum deposit.
Savings Guru says it expects this Recognise account will only be available for a few days so savers should move quickly if it appeals. Savers have 30 days to fund the account once opened.
Three banks offer a three year fixed term bond of 6 per cent. RCI Bank, Hodge Bank and Blme. These banks have a minimum deposit of £1,000 and a maximum limit of £1,000,000.
What are Green Savings Bonds?
The Green Savings Bond is a savings account from the Treasury-backed bank National Savings & Investments (NS&I), which uses savers’ cash to pay for green government infrastructure projects.
The first Issue of Green Savings Bonds went on sale on 22 October 2021. Since then more than £915million has been invested in them.
The first issue of the account offered just 0.65 per cent interest and was criticised by experts at the time for the low rate, and also the relatively niche length of the fix.
The second issue, four months later, offered 1.3 per cent interest and it was then upped to 3 per cent in August 2022.
In February, another boost took it to 4.2 per cent before today’s announcement.
On a pot of £10,000, savers can expect interest of £1,860 upon maturity with the new 5.7 per cent rate.
On its first issue – which some people will still hold, with expiry dates starting from October 2024 – £10,000 will return just £197 interest.
Unlike some NS&I products, these green bonds are not tax-free. NS&I says: ‘The interest you earn on Green Savings Bonds will count towards your taxable income in the tax year your bond matures.’