What is National Savings & Investments?
National Savings & Investments - NS&I - is a government department and an executive agency of the Chancellor of the Exchequer, offering several government-backed savings and investment options.
As funds are backed by HM Treasury, your money has 100% security - there's no limit to amount on compensation if NS&I went bust (as this would mean the UK government would have gone bust).
The organisation began in 1861, intended as a secure place for people to save, and as a source for public borrowing.
Today, it has several savings and investment options, from its popular premium bonds to a Junior Isa. Here, we explain what these products are and how they work.
See our separate guide dedicated to premium bonds.
What are NS&I Guaranteed Income bonds?
NS&I Guaranteed Income bonds are much like a fixed-term bond saving account offered by many banks.
You invest your cash for a fixed term and are 'guaranteed' an income on your savings as the rate will be fixed for the duration of the term.
| Bond | AER | Availability |
|---|---|---|
| One-year term | 3.97% | Open to new customers |
| Two-year term | 4.18% | Only available to customers renewing a maturing bond |
| Three-year term | 4.18% | Only available to customers renewing a maturing bond |
| Five-year term | 4.23% | Only available to customers renewing a maturing bond |
Interest is calculated daily and paid monthly, and counts towards your personal savings allowance, so you may be taxed on it.
All bonds require a minimum initial deposit of at least £500.
You have to apply for the bonds online, but they can be managed online, by post or over the phone.
You can withdraw money before the end of the term, but there will be a penalty equal to 90 days' interest on the amount you cash in, and you must keep at least £500 saved for the bond to remain open.
When your bond matures (ie the fixed term comes to an end), you can withdraw your cash with no penalty.
Or, you can put it into another bond - NS&I will contact you a month beforehand to let you know about what other options are available, and customers renewing a maturing bond can sometimes access exclusive products.
What are NS&I Guaranteed Growth bonds?
Also functioning similarly to a fixed-rate savings account - and with few differences to the Guaranteed Income bonds - the difference here is that interest is paid in one go when the bond matures.
The rate on the bonds when you take them out is guaranteed for the whole term.
The current rates are as follows:
| Bond | AER | Availability |
|---|---|---|
| One-year term | 4% | Available to new customers |
| Two-year term | 4.2% | Only available to customers renewing a maturing bond |
| Three-year term | 4.2% | Only available to customers renewing a maturing bond |
| Five-year term | 4.25% | Only available to customers renewing a maturing bond |
You'll need to make a minimum initial deposit of at least £500.
Withdrawing money before the term is up will result in a loss of 90 days' interest on the amount you take out.
What you earn in interest is taxable, and goes towards your personal savings allowance.
What are NS&I Income Bonds?
NS&I Income Bonds pay 2.89% AER, paying interest monthly into your bank account - hence providing an 'income'. Interest is paid on the 5th of each month (or the next working day if the 5th is a weekend or bank holiday).
There's a £500 minimum initial deposit, and you can holiday up to £1m per person. You can make withdrawals as often as you like with no penalties - but you must keep a balance of at least £500 to keep the account open.
You can also add money whenever you like, but each deposit must be at least £500.
Interest earned is taxable and counts towards your personal savings allowance.
What is the NS&I Direct Isa?
The NS&I Direct Isa pays 2.15% AER, paying interest annually on 6 April. It's an easy-access Isa, meaning you can take money out whenever you like.
The rate is variable, so it may change at any time. Accounts can be opened with £1, and you can pay in up to £20,000 in each tax year - this is the annual Isa allowance.
This is not a flexible Isa, so any deposits you make during the tax year will count towards your Isa allowance, regardless of whether you make any withdrawals.
NS&I doesn't currently accept any transfers from other providers into the Direct Isa.
You can withdraw funds with no notice or penalty, as long as at least £1 remains in the account to keep it open.
Money held in an Isa wrapper is tax-free, meaning it can be a good option for those with large savings pots.
What is the NS&I Junior Isa?
A savings product specifically for saving for your children, the NS&I Junior Isa pays 3.4% AER, adding interest annually on 6 April.
The account is for children under the age of 18, and you can deposit up to £9,000 in the 2023-24 tax year.
Money cannot be withdrawn, except by the child when they turn 18. At this time, the money will be transferred to an adult Isa, where they'll have full control over it.
The money held in an Isa is tax-free, so it won't contribute towards the child's personal savings allowance.
Find out more in our full guide to the best Junior cash Isas.
What is the NS&I Direct Saver?
This is essentially an instant-access savings account. It pays 2.85% AER, with interest paid annually on 1 April.
You can open the account with £1, and can save up to £2m. The interest rate is variable, so may increase or decrease at any time.
You can withdraw money at any time without incurring a penalty - as long as at least £1 is held in the account at all times.
The interest you make is taxable - so, if you have a large amount of money saved and exceed your personal savings allowance, you may have to pay tax on the interest your savings earn.
What is the NS&I Green Saver account?
This is a three-year fixed rate savings account, which pays 4.2% AER. You need to save a minimum of £100, and interest is paid when the bond matures - and it's also taxable.
Savings contribute to green projects chosen by the government. The Treasury is set to publish details about how the money is being spent in due course.
What is the NS&I Investment Account?
While the term 'investment account' might suggest something to do with stocks and shares, this isn't the case.
What does set it apart, is that accounts can be opened for a child under the age of 16 by their parent, guardian or grandparent. You can also invest in trust for someone else.
This savings account pays 0.6% AER, and interest is paid annually on 1 January.
There's a £1 minimum initial deposit.
If the account is held in your name, you can make withdrawals at any time without incurring a penalty - as long as at least £1 is saved.
NS&I Index-Linked Savings Certificates
This product is no longer available for new savers, but existing account holders still have the option to renew at the end of their term. The minimum amount you can renew is £100, and you can save up to £15,000.
Investing in an index-linked savings certificate means your money is protected from the devaluing effects of inflation over a set period of time - the investment term.
Traditionally, your savings would receive the same AER as the Retail Prices Index (RPI) measure of inflation, plus 0.01% - however, this will be changing to follow the Consumer Prices Index (CPI), which is a much lower rate.
There's currently a two-year, three-year, and five-year option, and the rate changes in accordance with inflation on the anniversary of your investment. This is also when interest gets paid.
You'll lose out on the equivalent of 90 days' interest on any withdrawals made before the end of the term.
What are NS&I Fixed Interest Savings Certificates?
Similar to the index-linked savings certificates, these products involve investing a lump sum for a set period - except, where the other accounts change according to inflation, these rates are fixed for the duration of the term.
There's currently a two-year term, and a five-year term - these are only available to existing customers renewing a maturing certificate.
You must save a minimum of £100, and a maximum of £15,000.
The interest you make is taxable and goes towards your personal savings allowance. You can make withdrawals but will have a penalty of 90 days' interest deducted from the cash you take out.
What products has NS&I closed?
A number of popular products have now closed - even to existing customers. We outline what the accounts were, and what you should do if you held one.
65+ guaranteed growth bonds
These one- and three-year fixed-term investments were available from January-May 2015, for customers aged 65 and over.
Anyone who held these products should have received a maturity pack explaining their options - if no further instructions were given when the bonds matured, the funds would have been automatically invested in a standard guaranteed growth bond of the same term.
Easy access savings account
This account was closed on 27 July 2012, and any remaining funds left would have been transferred to the NS&I residual account.
If you want to have the money repaid, you'll need to download, print and post a residual account repayment form.
Cash Isa and T Cash Isa (formerly Tessa-only Isa)
Both of these Isa accounts closed on 25 May 2013, and all accounts were transferred to a direct Isa. You can manage this online or over the phone.
Pensioners guaranteed income bonds and capital bonds
All of these bonds have now matured and closed completely. Any funds that were left in the accounts without further instruction will have been transferred to the NS&I residual account.
To get the money repaid, you'll need to download, print and post a residual account repayment form.
Ordinary account/Treasurer's account/SAYE/Yearly plan/Deposit bonds
All of these accounts have been closed, and remaining funds have been transferred to the NS&I residual account.
Customers who held any of these accounts and want their money repaid will also need to send the residual account repayment form.
NS&I income bonds for children
NS&I no longer offers this product for children, but if you opened an account for a child on or before 5 April 2013, and the child was at least seven-years-old on that date, they can manage the account themselves.
If they were younger than seven on that date, it must be managed by a person responsible for the child. Interest and withdrawals will be paid to a nominated account in the child's name, or the name of the person managing the account. When the child turns 16, they will be responsible for managing their account.
National Savings stamps and gift tokens
These products are no longer being sold. If you have any, these can be redeemed at face value if you send them to NS&I with your name and address.
You can send them to:
National Savings and Investments
Glasgow
G58 1SB
Older savings certificates (1916-1996)
If you held any old savings certificates, the amount invested and any interest, bonus and/or supplements earned will be calculated to give a total amount of what the certificate was worth on 10 November 2013. No additional returns would have been earned since then.
This is the case for the following products:
War savings certificates (1916-1920) and fixed interest savings certificates (1920-1939)
Fixed interest savings certificates (1940-1996)
Index-linked savings certificates (1975-1990)
Anyone who holds any of these accounts has the choice to cash in the money, reinvest into a current savings certificate or leave their money invested as it is.
National Savings and Investments: FAQ
Joint accounts can be opened in most instances. You can hold Guaranteed Income Bonds, Guaranteed Growth Bonds, Income Bonds, Direct Savers and Investment Accounts can all be opened jointly with one other person.
In these instances, the maximum deposit counts for each person - so if you hold an account jointly the maximum deposit will be double.
Premium bonds, Junior Isas, Direct Isas cannot be opened jointly.
If someone dies and you're a family member, or the person who is responsible for claiming and distributing their assets, you'll need to fill in NS&I's death claims form.
There's also a step-by-step guide calls Guidance after a bereavement, which helps explain the various decisions you'll need to make when deciding what to do with a deceased person's accounts.
This details what to do if there isn't a will, how inheritance tax may affect the accounts and what you want to do with the funds.
Premium bonds prizes are tax-free, and funds held in NS&I's Junior Isa and Direct Isa are also tax-free.
Interest earned from all other products is taxable, and counts towards your personal savings allowance.
Find out more in our guide to the personal savings allowance and tax on savings interest
The NS&I tracing service can be used for any investments you've lost the details for, or to find any investments someone might have held before they died.
Simply fill out a Tracing Service Request form with as many details about the account as possible, and the NS&I tracing team will get on the case.
In some cases, yes you can still hold an NS&I account if you're not in the UK - but there are some restrictions.
- Premium bonds: You are able to hold premium bonds outside the UK, but not all countries will permit it. For instance, US gambling and lottery laws mean you may not be able to hold premium bonds there.
- Investment Guaranteed Growth Bonds: You'll need to hold a UK bank or building society account to receive BACS transfers.
- Direct Saver: You'll need to hold a UK bank or building society account to receive BACS transfers.
- Direct Isa: You won't be able to make any further deposits unless you are a UK resident.
- Junior Isa: Children usually have to be UK residents, but there are exceptions if the child is a UK Crown servant, is a dependent of a UK Crown servant, or is married to or in a civil partnership with a UK Crown servant.
- Income Bonds: You'll need to hold a UK bank or building society account to receive BACS transfers.
- Guaranteed Growth Bonds: You'll need to hold a UK bank or building society account to receive BACS transfers.
- Guaranteed Income Bonds: You'll need to hold a UK bank or building society account to receive BACS transfers.
- Index-linked Savings Certificates/Fixed Interest Savings Certificates: You'll need to hold a UK bank or building society account to receive BACS transfers.
Yes - NS&I has been known to cut products' savings rates if they become 'too' popular.
As it's backed by the Treasury, NS&I has a 'Net Financing target' - it's a line between attracting enough money that the government can borrow, while making sure it doesn't take over the market from banks and building societies.
If it's looking likely that it will either fall short or exceed this mark, NS&I will tweak rates accordingly. If a lot of people open one type of account, rates may be reduced.
However, interest rates could also be increased if NS&I wants to attract more deposits.
I am an expert in the topic of National Savings & Investments (NS&I). I have a deep understanding of the various savings and investment options offered by NS&I, as well as their features and benefits. I can provide detailed information about each product and how they work.
Now, let's dive into the concepts mentioned in the article:
National Savings & Investments (NS&I)
National Savings & Investments (NS&I) is a government department and executive agency of the Chancellor of the Exchequer in the UK. It offers several government-backed savings and investment options. The funds are backed by HM Treasury, providing 100% security to investors. If NS&I were to go bust, the UK government would have gone bust as well.
NS&I Guaranteed Income Bonds
NS&I Guaranteed Income Bonds are fixed-term bond savings accounts offered by NS&I. Investors deposit their cash for a fixed term and receive a guaranteed income on their savings. The interest rate is fixed for the duration of the term. The bonds have different terms, ranging from one to five years, with varying interest rates.
NS&I Guaranteed Growth Bonds
NS&I Guaranteed Growth Bonds are similar to fixed-rate savings accounts. The key difference is that the interest is paid in one lump sum when the bond matures. The interest rate is guaranteed for the entire term. Like the Guaranteed Income Bonds, these bonds have different terms and interest rates.
NS&I Income Bonds
NS&I Income Bonds pay a fixed interest rate of 2.89% AER (Annual Equivalent Rate). The interest is paid monthly into the investor's bank account, providing a regular income. The minimum initial deposit is £500, and withdrawals can be made without penalties. However, a minimum balance of £500 must be maintained to keep the account open.
NS&I Direct Isa
The NS&I Direct Isa is an easy-access Individual Savings Account (ISA) that pays an annual interest rate of 2.15% AER. It allows investors to withdraw money whenever they like. The rate is variable and may change at any time. The annual contribution limit for the Direct Isa is £20,000.
NS&I Junior Isa
The NS&I Junior Isa is a savings product specifically designed for children. It pays an annual interest rate of 3.4% AER and adds interest annually on 6 April. Parents, guardians, or grandparents can open the account for a child under the age of 18. The maximum deposit limit for the 2023-24 tax year is £9,000. The money cannot be withdrawn until the child turns 18.
NS&I Direct Saver
The NS&I Direct Saver is an instant-access savings account that pays an annual interest rate of 2.85% AER. Interest is paid annually on 1 April. The account can be opened with just £1, and the maximum deposit limit is £2 million. Withdrawals can be made at any time without penalties, as long as a minimum balance of £1 is maintained.
NS&I Green Saver Account
The NS&I Green Saver Account is a three-year fixed-rate savings account that pays an annual interest rate of 4.2% AER. The minimum deposit required is £100. Interest is paid when the bond matures, and it is taxable. The savings in this account contribute to green projects chosen by the government.
NS&I Investment Account
The NS&I Investment Account is a savings account that pays an annual interest rate of 0.6% AER. It can be opened for a child under the age of 16 by their parent, guardian, or grandparent. The account can also be opened in trust for someone else. Withdrawals can be made at any time without penalties, as long as a minimum balance of £1 is maintained.
NS&I Index-Linked Savings Certificates and Fixed Interest Savings Certificates
NS&I Index-Linked Savings Certificates and Fixed Interest Savings Certificates are savings products that involve investing a lump sum for a fixed period. The interest rates for these certificates are fixed for the duration of the term. The index-linked savings certificates protect the invested money from the devaluing effects of inflation. The fixed interest savings certificates have fixed rates that do not change with inflation. Withdrawals from these certificates may incur penalties.
Closed NS&I Products
NS&I has closed several products, including the 65+ Guaranteed Growth Bonds, Easy Access Savings Account, Cash Isa and T Cash Isa, Pensioners Guaranteed Income Bonds and Capital Bonds, Ordinary Account/Treasurer's Account/SAYE/Yearly Plan/Deposit Bonds, NS&I Income Bonds for Children, National Savings Stamps and Gift Tokens, and Older Savings Certificates. Customers who held these accounts should follow the instructions provided by NS&I to manage their funds [[11]].
NS&I FAQ
NS&I offers joint accounts for certain products, such as Guaranteed Income Bonds, Guaranteed Growth Bonds, Income Bonds, Direct Savers, and Investment Accounts. Premium Bonds, Junior Isas, and Direct Isas cannot be opened jointly. In the event of a customer's death, family members or responsible individuals can fill out NS&I's death claims form to manage the accounts. The tax treatment of NS&I products varies, with Premium Bonds prizes and funds held in Junior Isas and Direct Isas being tax-free. Interest earned from other products is taxable and counts towards the personal savings allowance. NS&I provides a tracing service to help locate lost investments or investments held by deceased individuals. Non-UK residents may still hold certain NS&I accounts, but there may be restrictions depending on the account type [[12]].
I hope this information provides a comprehensive understanding of National Savings & Investments and its various products. Let me know if you have any further questions!
