NS&I launches table-topping one year fixed rate bond
The interest rate on NS&I's 12-month fixed bonds has been increased, making them one of the most favorable savings options available right now.
The company that offers Premium Bonds has recently launched new versions of its one-year fixed rate Guaranteed Growth Bonds and Guaranteed Income Bonds. These bonds promise a 6.2% AER interest rate, the highest rate ever offered since these products became available for purchase in 2008.
Earlier, they offered a 5% payout. This enhancement puts them at the top of the market for one-year fixed rate savings accounts. The items are now obtainable starting today, August 30th.
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Savings institutions have been increasing their rates in an effort to transfer the interest rate increases implemented by the Bank of England (BoE) to those who save money. However, many of them have been slow to take action, which has led to disapproval from the Financial Conduct Authority (FCA).
According to Sarah Coles, the head of personal finance at Hargreaves Lansdown, NS&I's recent increase in rates is great news for savers. They now have the opportunity to secure a high rate with a 100% guarantee from the Treasury, which is currently one of the highest rates available for one-year savings accounts.
The current base rate set by the Bank of England is 5.25%, the highest it has been since 2008. In contrast, the rate of inflation dropped to 6.8% in July. Although NS&I's rates are not yet surpassing inflation, they are gradually getting closer to doing so.
NS&I has increased the interest rates on several of its offerings in recent months in an attempt to attract more funds from savers. In early August, it raised the interest rate on its Premium Bond prize fund to its highest level in 24 years. Additionally, it also raised the interest rate on its Green Savings Bonds to 5.7%, although customers must be willing to commit to a three-year term for their money.
NS&I 1-Year Bond: A Guide
In order to allocate your funds towards this merchandise, you must be ready to keep your money inaccessible for a twelve-month period. Individuals looking to save must possess a minimum investment amount of £500, and are allowed to invest a maximum of £1,000,000.
The payout will be made upon the bond reaching maturity. When your bond reaches maturity, you will be given the choice to either withdraw or reinvest your money.
The savings company is also enhancing the interest rates on its savings products with a fixed duration, which are exclusively accessible to individuals whose previous products have reached maturity. You have the option to view the increments in rates through this table, which has been provided by NS&I.
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Comparing Other Products
NS&I's most recent offerings provide the highest available interest rates to individuals seeking one-year fixed options.
The attractiveness of the savings provider lies in the fact that it receives complete support from the Treasury. Unlike most banks that are safeguarded by the FSCS compensation scheme, which provides coverage for only up to £85,000 of your funds.
The 1 Year Fixed Rate Saver from Investec provides a 6% interest rate, and you have the option to start the account with a minimum deposit of £5,000.
The 1 Year Fixed Bond provided by Close Brothers Savings also presents a 6% interest rate, and a minimum deposit of £10,000 is required to initiate the account.
Kent Reliance is offering a 1 Year Fixed Bond that provides a return of 5.98%. A minimum deposit of £1,000 is required to open this bond.
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