NS&I British Savings Bonds Relaunch: 4.50% Rates Details

National Savings & Investments launched new issues of British Savings Bonds on 28 April 2026, pushing one-year rates to 4.50% AER — a jump of 0.43 percentage points from the 4.07% that had applied since January. These Government-backed fixed-term products now rank among the most competitive secured savings options available to UK investors, sitting roughly a full percentage point above the current market average of 3.48%.

1-Year Rate: 4.50% AER ·
Previous Rate: 4.07% AER ·
Min Investment: £500 ·
Max Investment: £1 million ·
Term Options: 1-year, 2-year

This table sets out the core specifications for the relaunched British Savings Bonds.

Is NS&I a 6.2% fixed rate?

No — the 6.2% figure that occasionally surfaces in search results appears to stem from older Premium Bonds prize rate expectations or short-lived promotional offers, not current British Savings Bonds pricing. The current flagship rate sits at 4.50% AER for one-year Guaranteed Growth Bonds (Issue 89), effective 28 April 2026 (NS&I Official). This represents a meaningful jump from the previous rate of 4.07% AER that applied from 6 January 2026, marking the largest single adjustment in recent NS&I cycles.

Current rates post-relaunch

All terms received increases simultaneously on 28 April. The Guaranteed Growth Bonds lineup now reads as follows (NS&I Corporate):

• 1-year Issue 89: 4.50% AER
• 2-year Issue 77: 4.48% AER
• 3-year Issue 79: 4.45% AER
• 5-year Issue 71: 4.40% AER

For savers preferring monthly income, the Guaranteed Income Bonds carry equivalent rates expressed as gross: 4.41% gross for 1-year (4.50% AER), 4.40% gross for 2-year (4.48% AER), and 4.32% gross for 5-year (4.40% AER) (NS&I Official). The shorter the term, the higher the rate — a pattern that reflects current market yield curves.

Comparison to previous rates

The jump from 4.07% to 4.50% AER amounts to a 0.43 percentage point increase on the one-year product. Moneyfactscompare rates the current average savings rate at 3.48%, meaning NS&I’s new one-year bonds now beat the typical market by roughly a full percentage point. That’s a notable gap for a risk-free, Government-backed product.

Comparing fixed rate bonds: NS&I vs. Raisin UK

MoneySavingExpert’s market tracking shows how NS&I’s new rates stack up against top competitors sourced from their rate comparisons:

Rate differences

NS&I undercuts the absolute market leaders by approximately 0.16–0.22 percentage points across terms. For example, Al-Rayan offers 4.70% for one-year versus NS&I’s 4.50% — a difference of £20 per £10,000 invested over a year. However, NS&I offers something those private banks cannot match: full HM Treasury backing. MoneySavingExpert notes that all NS&I accounts are backed by the UK Treasury for total safety, a guarantee that private institutions simply do not provide.

Terms and guarantees

Both NS&I and Raisin-listed products operate on fixed-term bases with no early access. However, NS&I’s Government backing creates a structural difference: deposits are guaranteed by the state, whereas Raisin partners are covered by the Financial Services Compensation Scheme (FSCS) up to £85,000. Neither is risk-free in absolute terms, but NS&I’s Treasury backing sits at a different level of sovereign assurance (NS&I Corporate).

The implication: investors who prioritise absolute capital certainty over marginal yield may find the 0.16–0.22% shortfall acceptable given the sovereign guarantee attached to NS&I products.

Are British savings Bonds tax-free?

No — British Savings Bonds are not tax-free. Unlike Premium Bonds, where all prize payouts escape UK income tax entirely, interest earned on British Savings Bonds is subject to tax at the saver’s marginal rate. The interest accrues gross, and HMRC expects investors to declare it through self-assessment where applicable.

Tax treatment details

NS&I pays interest gross on Guaranteed Growth Bonds and Guaranteed Income Bonds, meaning tax is not deducted at source. This contrasts with many building society accounts that still offer gross-to-basic-rate tax treatment. Higher-rate and additional-rate taxpayers will owe more on interest income, while basic-rate taxpayers may find their personal savings allowance covers some or all of the earnings depending on the amount invested (Moneyfactscompare).

Declaration requirements

For most basic-rate taxpayers with typical savings balances, the personal savings allowance (£1,000 per year for basic-rate) may fully cover British Savings Bonds interest, provided the total savings interest across all accounts stays within that threshold. Investors holding near-maximum positions (£1 million across multiple issues) will almost certainly exceed allowances and face a tax liability, making this a material consideration for high-net-worth savers.

Are NS&I Guaranteed Growth Bonds still available?

Yes, and they now carry the branding “British Savings Bonds” as the consumer-facing name while maintaining the underlying Guaranteed Growth Bond structure. New issues went on sale 28 April 2026 (Moneyfactscompare), accessible to both new customers and those with maturing bonds rolling over into the latest terms.

New issues status

Issue 89 marks the current one-year product, with Issue 77 covering 2-year terms, Issue 79 for 3-year, and Issue 71 for 5-year (NS&I Official). Each issue represents a distinct product with its own rate — investors selecting a term are automatically assigned the relevant issue number. Previous issues (from January 2026 or earlier) are no longer open for new purchases but remain active for existing holders until maturity.

Issue limits

The minimum deposit stands at £500, with a maximum of £1 million per issue (Moneyfactscompare). No further deposits can be made into a bond after the initial investment, and no early access withdrawals are permitted before maturity — a standard feature of fixed-term products designed to give NS&I predictable funding horizons. All account management operates exclusively online through the NS&I website.

Which bonds are completely tax-free?

In the NS&I product range, only Premium Bonds qualify as completely tax-free. Every prize drawn from the Premium Bond draw is exempt from UK Income Tax and Capital Gains Tax — a privilege granted by the specific legislation governing Premium Bonds (NS&I Official). British Savings Bonds carry no such exemption.

NS&I options

The NS&I portfolio includes three main categories with differing tax treatments: Premium Bonds (tax-free prizes), British Savings Bonds (interest taxable), and Green Savings Bonds (interest taxable, with ethical investment framing). Premium Bonds remain the sole tax-free option within the NS&I family, though they offer variable prize rates rather than a guaranteed return.

Competitor tax-free bonds

Beyond NS&I, no standard fixed-rate savings bonds offer tax-free interest in the UK — the personal savings allowance has largely replaced preferential tax treatment for standard savings products. However, Innovative Finance ISAs and certain other structures can shelter savings from tax, though these come with different risk profiles and accessibility requirements not directly comparable to NS&I’s offering.

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The NS&I British Savings Bonds relaunch at 4.50% AER receives similar attention in Headlinely’s latest coverage, providing key details on terms.

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