Nearly a quarter of a million savers snapped up the market-leading NS&I one-year bonds paying 6.2% before they were withdrawn from sale. Where can you find the best deals now?
Five weeks after launching the table-topping Guaranteed Growth Bonds and Guaranteed Income Bonds, NS&I confirmed they’ve been withdrawn from sale as of today.
They offered 6.20% gross/AER and 6.03% gross/6.20% AER respectively and were the highest ever interest rates for both bonds which first went on sale in 2008.
NS&I revealed more than 225,000 customers opened the accounts and it remains on track to meet its net financing target for 2023/24.
While NS&I stopped taking new sales today, it said postal applications received for a “reasonable period will be honoured”.
NS&I chief executive, Dax Harkins, said: “This summer’s new one-year fixed-rate bonds have been a great success. I am pleased we were able to keep them on sale for over five weeks, enabling more than 225,000 savers to benefit from the highest interest rates we have ever offered on these products.”
Guaranteed Growth and Income Bonds
Guaranteed Growth Bonds are a lump sum investment that earn a fixed rate of interest over a set period of time. The bonds are designed to be held for the full term. Interest is calculated daily and is added to the bond on each anniversary of the investment.
Guaranteed Income Bonds are a lump sum investment that pays out monthly income at a fixed rate of interest over a set period of time. Interest is calculated daily and is paid into the customer’s nominated bank account.
Savers needed a minimum investment of £500 to invest in either bond, and could invest up to a maximum of £1m in each issue (Issue 72), with all money invested 100% backed by the Treasury.
On maturity, existing Guaranteed Growth Bonds and Guaranteed Income Bonds customers will have the choice to withdraw their cash or reinvest for another term of the same length.
Alternatively, they can reinvest into any of the other terms and issues of Guaranteed Growth Bonds and Guaranteed Income Bonds on offer to existing customers (one-, two-, three- and five-year terms for both products), regardless of which Guaranteed Growth Bond or Guaranteed Income Bond they currently hold.
Best buy one-year savings bonds
Sarah Coles, head of personal finance at Hargreaves Lansdown, said it’s “hardly a surprise” that these products flew off the shelves as they combined a market-beating rate with government-backing.
She said: “NS&I has to keep within the boundaries of its financing target and its £3bn wriggle room so it was clear that these products were going to sell out quickly.”
Coles added that savers are still benefiting from easy access rates over 5% and “should look way beyond the high street to make more of their money.”
So where can savers get the maximum interest for a one-year bond now?
According to Savings Champion data, a trio of providers are offering 6.11% AER gross.
These are Oxbury’s Personal 1 Year Bond Account (Issue 32) on a minimum £1,000 deposit for online applications, Union Bank of India UK Fixed Rate Deposit – 1 Year, again on a minimum £1,000 but this can be opened in branch and by post, and SmartSave 1 Year Fixed Rate Saver. But this comes with a hefty minimum deposit amount of £10,000 and can only be opened online.
Related: How to get 7.5% interest without tying up your savings for years
