NS&I cuts its £1m savings limit

Written by Oliver Wade
11/06/2018

NS&I has cut the savings limit on its one and three-year Guaranteed Growth Bonds and Guaranteed Income Bonds from £1m to £10,000, reported Hargreaves Lansdown.

However, it has said that its rates will stay the same, with Guaranteed Growth Bonds paying 1.5% over one year and 1.95% over three years.

Hargreaves Lansdown said that the bonds had been “incredibly popular”, due to almost 900,000 three-year pensioner bonds maturing between January and May and automatically being rolled into the three-year Guaranteed Growth Bond, unless savers had chosen to opt out.

Hargreaves Lansdown personal finance analyst Sarah Coles said: “Savers with a lot of cash loved these products, because they could save up to £1 million in each, with a government-backed guarantee. If they are to save elsewhere, the first £85,000 is protected by the Financial Services Compensation Scheme, but if they have more than this, they need to spread their money around.

“There’s a stay of execution for existing NS&I savers, because if they roll their money into these bonds at maturity, they’ll get a £1 million limit.”

However, the firm also said that savers can get better interest rates elsewhere, up to 2.31%.

“New savers should look elsewhere for a better rate. The three-year NS&I Guaranteed Growth Bond offers 1.95% interest, which is well below the most competitive fixed rate over this period (2.31% from RCI Bank). Competition in the one-year fixed rate account market, meanwhile, has been intensifying in recent weeks, so you can now get up to 2.05% (Atom Bank) compared to the 1.5% available from NS&I’s Guaranteed Growth Bond,” Coles added.

“In both instances, even if they have £1 million and have to spread it over the 12 most competitive accounts in order to ensure their money is protected by the FSCS, savers will still get a better rate on even the least competitive of the 12 than they would from NS&I at the moment.”

    Share Story:

Specialist FTB and BTL markets
Adam Cadle talks to Vida Homeloans director of sales - mortgages Louisa Sedgwick about the specialist first time buyer and buy to let markets

Newsletter

Subscribe to our newsletter to receive breaking news by email.




MoneyAge welcome
MoneyAge Editor Adam Cadle discusses the brand and what is on offer

World Markets (15 minute+ time delay)