National Savings and Investments (NS&I) has increased interest rates across its one, two, three, and five-year fixed British Savings Bonds, effective July 31, 2026.
The top rate now stands at 4.75 percent for five-year terms.
The state-backed institution introduced new issues of its Guaranteed Growth Bonds and Guaranteed Income Bonds to support its Net Financing target while keeping pace with rising returns in the savings market.
Revised Rates and Product Details
Under the revised rates, the one-year Guaranteed Growth Bond rose to 4.72 percent gross/AER, while the equivalent Guaranteed Income Bond increased to 4.63 percent gross and 4.72 percent AER.
Two-year growth options climbed to 4.70 percent AER, and three-year growth products shifted to 4.68 percent AER.
The largest rate hike was applied to the five-year growth bond, which saw a 0.20 percentage point increase to reach 4.75 percent gross/AER.
The corresponding five-year income bond now offers 4.65 percent gross and 4.75 percent AER.
These adjustments follow the Bank of England Monetary Policy Committee's decision to maintain the base rate at 3.75 percent.
To open a British Savings Bond, customers require a minimum deposit of £500, with a maximum holding limit of £1 million per person per issue.
Early withdrawals are strictly prohibited.
Andrew Westhead, Retail Director at NS&I, said: "Today's increases mean savers can now choose from improved fixed-term rates across our one, two, three and five-year British Savings Bonds, with the certainty of knowing exactly what return they will receive over their chosen term."
The government-backed bank emphasizes that all customer deposits carry complete security guaranteed directly by HM Treasury.
Westhead added: "Alongside that certainty, customers continue to benefit from the reassurance that all money invested with NS&I is 100 per cent secure and backed by HM Treasury."
Market Comparison and Expert Views
While the rate adjustments make NS&I more competitive, alternative providers currently offer slightly higher yields.
Investec pays 5.00 percent on a three-year fixed account, and Atom Bank matches 5.00 percent on a five-year term, marking the first time since 2024 that fixed rates have reached this threshold.
Caitlyn Eastell, personal finance analyst at Moneyfacts, said: "Unlike traditional savings accounts, every pound held with NS&I is backed by HM Treasury, giving savers an unlimited Government guarantee rather than the £120,000 FSCS protection available with banks and building societies."
Financial analysts note that the savings market has intensified as competing banks scramble for deposits in a high-rate environment.
Eastell commented: "NS&I’s decision to increase rates on its British Savings Bonds is a welcome boost for savers and makes them a far more competitive option in the current fixed rate savings market."
She added that recent rate increases reflect broader competition among lenders trying to attract long-term funds.
"This move from NS&I comes at a time when providers are competing for deposits," said Eastell.
Because market conditions shift quickly, experts advise savers to act decisively before top deals are withdrawn or modified.
"The most competitive deals can be short-lived," warned Eastell.
For consumers seeking flexibility over locked-in bonds, top easy-access accounts currently pay around 5.00 percent AER, though these often include temporary bonus boosts.
