On May 1, 2026, NS&I announced significant rate hikes across its guaranteed growth bonds and guaranteed income bonds. This move aims to attract more savers during a challenging economic landscape marked by rising inflation.
The new rates are as follows:
- The one-year British savings bond rate increased from 4.07% to 4.5% AER.
- The two-year bond rate increased from 3.98% to 4.48% AER.
- The three-year bond rate increased from 4.02% to 4.45% AER.
- The five-year bond rate increased from 4.05% to 4.4% AER.
As of midday, NS&I’s Premium Bonds also see a maximum holding limit of £50,000. The prize fund rate stands at 3.3%, with the odds of securing a prize being 23,000 to one for each £1 Bond.
Experts note that these changes are crucial for tax-paying savers. Anna Bowes emphasized that “this choice can be important, particularly for those who pay tax on their savings.” Meanwhile, Dan Coatsworth remarked that NS&I effectively competes with banks as a popular savings brand across the UK.
This adjustment comes as NS&I routinely modifies its rates to manage the flow of money into the state-owned bank, aiming to meet its net financing target. The recent increases in interest rates reflect ongoing adjustments in response to economic conditions.
In this context of fluctuating interest rates, UK savers may find renewed opportunities in these bonds. The changes could help mitigate some impacts of inflation on savings accounts.