NS&I has put 1-year and 3-year Guaranteed Growth Bonds and Guaranteed Income Bonds back on general sale.

The 1-year Guaranteed Growth Bond will pay 1.50% gross/AER, while the 3-year bond will pay 2.20% gross/AER. The 1-year Guaranteed Income Bond will pay 1.45% gross/1.46% AER, and the 3-year bond will pay 2.15% gross/2.17% AER.

Hargreaves Lansdown personal finance analyst Sarah Coles: “These new bonds are part of NS&I’s ambitious target to attract between £10bn and £16bn of net financing in the next tax year. The last time it had such a bold target we saw the launch of the so-called Pensioner Bond, paying 4% over five years, which saw £2.3bn invested in its first three days.

“These bonds are not quite so generous, but they are competitive. At the time of writing, the 3-year Guaranteed Growth Bond looks particularly strong, offering the second highest interest rate for a minimum investment of £500 over this term – and matching its current three-year offering, which is on sale until April 2018. The 1-year Guaranteed Growth Bond is also among the top five most generous rates (for £500) over this period, in the current market.

“With a minimum investment of £500 and maximum of £1m – guaranteed by the government, it will be particularly attractive to investors with significant savings. Their savings would otherwise need to sit in numerous accounts - with gradually less rewarding interest rates - in order to be protected under the £85,000 limit of the Financial Services Compensation Scheme. These bonds offer 100% protection for up to £1m.”

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