NS&I boosts interest rate on Green Savings Bonds to 5.7% (2024)

Savers can now get a return of 5.7% if they’re willing to lock their money up for three years with National Savings and Investments () thanks to the Bank of England’s (BoE) string of rate hikes.

The state-backed provided has launched a new three-year issue of its Green Savings Bonds with a rate of 5.7%, up from 4.2% offered in February. It was just 0.65% at launch in October 2021.

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NS&I boosts interest rate on Green Savings Bonds to 5.7% (1)

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Dax Harkins, NS&I chief executive, says: 'I'm really pleased that we can offer a new Issue of our Green Savings Bonds at a higher rate from today.

“This is a great opportunity for savers who want to see a guaranteed return on their investment while also making a difference with their savings by helping to make the world greener, cleaner and more sustainable.”

How much can you save in NS&I Green Savings Bonds?

The minimum investment is £100, with a maximum investment of £100,000.

There is a 30-day cooling-off period if you change your mind, but after that, you won’t be able to access your money until maturity.

Interest is calculated daily and added yearly on the investment’s anniversary date, but paid at the end of term.

You can purchase the bond online at nsandi.

Is NS&I’s Green Savings Bond right for me?

“The rate on the bond now is a far cry from the 0.65% at its launch almost two years ago – partly reflecting the steep rise in interest rates in the savings market since then and partly as a result of slow initial take-up of NS&I’s newest product,” says Laura Suter, head of personal finance at AJ Bell.

“Someone who put £5,000 into the bonds at launch will be earning just £32.50 a year in interest, compared to the £285 a year that a new customer will be getting today on the same amount. If they had invested £20,000 that difference in interest jumps to more than £1,000 a year,” she adds.

Despite the boost, the interest rate is still below the market-leading three-year bond of 6.05%

“On £10,000 of savings that means savers are sacrificing around £35 of interest a year to go green. The new interest rate puts the account just ahead of green-focused Gatehouse Bank’s three-year Woodland Saver, which pays 5.5% and plants a tree for every account opened,” Sutter adds.

The money invested in these bonds goes towards funding various projects aimed at promoting a greener and more sustainable future. These projects include initiatives to make the transport sector more environmentally friendly, the adoption of renewable energy sources over fossil fuels, pollution prevention, energy efficiency, protection of natural resources, and adaptation to a changing climate.

The first issue of Green Savings Bonds went on sale on 22 October 2021. Since then more than £915m has been invested in them. It is part of the UK Government Green Financing Framework announced by then Chancellor Rishi Sunak to help drive progress to net zero and fund key green projects across the country.

“Green Bonds haven’t flourished quite the way that the government may have wanted. It’s going to be crossing its fingers that this is the enrichment it needs to get the product to blossom,” says Mark Hicks, head of savings at Hargreaves Lansdown.

“It’s a decent rate, but for those keen to seek out the most competitive deals on the market, it falls short. It’s marginally less competitive than the previous issue – which was 0.25 percentage points lower than the top rate when it was launched. This time it’s very slightly further behind the leader. It means you can do better elsewhere,” he adds.

Also, unlike some NS&I products, these green bonds are not tax-free. NS&I says: “The interest you earn on Green Savings Bonds will count towards your taxable income in the tax year your bond matures.”

Can you beat NS&I's interest rate?

For those that want a better return outside the green bond space, banks and building societies have been raising their savings rates as the base rate continues to rise.

For instance, Santander has just hiked the interest paid on its Edge Saver account, meaning it now pays 7%.

The best one-year fixed savings accounts offer rates of up to 4.18%, so they might be a better option if you don’t want to part with your money long-term

MoneyWeek provides a full round-up of all the providers, big and small, that have recently upped their savings rates and how they compare to the rest of the market.

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National Savings And Investments

NS&I boosts interest rate on Green Savings Bonds to 5.7% (2024)


Are NS&I green bonds worth it? ›

What is the interest rate on Green Bonds? In January 2024, NS&I lowered the rate on its green bond again. It now pays an interest rate of 2.95% AER a year, fixed for three years. This means that if you invested £10,000 you would earn £295 per year or just under £10,912 in total over three years after compound interest.

What is the green bond issue for NS&I? ›

Launched in 2021, Green Savings Bonds enable savers to help fund green government projects across the UK. Green Savings Bonds are separate to NS&I's Net Financing target set by HM Treasury each year. The minimum investment in Green Savings Bonds is £100, with a maximum limit of £100,000 per person for each Issue.

What is the interest rate of green bonds? ›

7.37% is the annual interest rate or coupon. This interest is paid out twice a year and credited directly to your primary bank account. GOI denotes the Government of India.

Is NS&I 6.2% still available? ›

This rate retreat is particularly focused on fixed-term products at the top end of the market. And is a result of the withdrawal of NS&I's 1 year fixed rate of 6.2% – the highest ever rate for its savings bond. The river of cash flowing into NS&I has now been diverted to the next best products in the market.

What are the disadvantages of NS&I? ›

One of the drawbacks with NS&I is that it does not often offer the best saving rates. It has to balance the interests of savers, taxpayers and the government. So, customers should beware of relying on and trusting NS&I to offer competitive rates, as sometimes that is not the case.

How safe are green bonds? ›

Additionally, they demonstrate a strong safe haven property with high-emission sectors for the entire study period and with all sectors except financials during the COVID-19 period. This hedging and safe haven benefit of green bonds is agnostic of the environmental disclosure score of a firm.

Are NS&I green bonds tax free? ›

Save up to £20,000 without paying a penny in tax on the interest. Invest from £1 to £20,000 in the tax year 2024/25.

What are the new NS&I interest rates? ›

NS&I increases interest rates
ProductPrevious interest rateInterest rate from today (25 October 2022)
Direct ISA0.90% gross/AER1.75% tax-free/AER (+85 basis points)
Junior ISA2.20% gross/AER2.70% tax-free/AER (+50 basis points)
Investment Account0.01% gross/AER0.40% gross/AER (+39 basis points)
2 more rows

Why do people invest in green bonds? ›

Green bonds may offer tax advantages, providing incentives for investing in sustainable projects that do not apply to comparable types of bonds. Investors seeking assets that align with their environmental values should be sure to verify the claims of sustainability made by bond issuers.

Which bank is best for green bonds? ›

In addition, Nedbank CIB clinched the regional award for Best Bank for Green Bonds in Africa, highlighting its leadership in funding initiatives that address climate change and promote sustainable practices.

What are the best green bonds? ›

List of Top 5 Green Bond ETFs in 2021
  • Xtrackers EUR Corporate Green Bond UCITS ETF +USD 145 million.
  • iShares Global Green Bond ETF +USD 124 million.
  • Xtrackers USD Corporate Green Bond UCITS ETF +USD 122 million.
  • Lyxor Green Bond UCITS ETF +USD 75 million.
  • Franklin Liberty Euro Green Bond UCITS ETF+USD 66 million.

Which bonds pay the most interest? ›

Our picks at a glance
1Vanguard High-Yield Corporate Fund Investor Shares (VWEHX)6.40%
2T. Rowe Price High Yield Fund (PRHYX)7.02%
3PGIM High Yield Fund Class A (PBHAX)7.22%
4Fidelity Capital & Income Fund (fa*gIX)6.16%
5 more rows
Mar 15, 2024

Where can I get 7% interest? ›

7% Interest Savings Accounts: What You Need To Know. Why Trust Us? As of May 2024, no banks are offering 7% interest rates on savings accounts. Two credit unions have high-interest checking accounts: Landmark Credit Union Premium Checking with 7.50% APY and OnPath Credit Union High Yield Checking with 7.00% APY.

Is NS&I 6.2% one-year fixed? ›

NS&I has withdrawn its hugely popular 6.2% one-year fixed savings deal for new customers from today (6 October).

What is the highest interest rate for NS&I? ›

NS&I offers highest EVER rate of 6.2% for one-year fixed rate Guaranteed Growth Bonds and boosts its income bonds too
  • New issues of these products will pay a rate of 6.2%, the previous issues paid 5%
  • This is the highest rate paid on these products since they launched in 2008.
Mar 19, 2024

Are green bonds successful? ›

The green bond market continues to grow rapidly, according to the World Economic Forum's report, Fostering Effective Energy Transition 2023, which noted $270 billion worth of issuances in 2020.

Is NS&I 6.2% one year fixed? ›

NS&I has withdrawn its hugely popular 6.2% one-year fixed savings deal for new customers from today (6 October).

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