Swerve NS&I’s new fixed rate bond unless green saving is your aim: SYLVIA MORRIS

NS&I has raised the rate on its three-year Green Savings Bonds from 4.45 per cent to 4.73 per cent, but the article argues savers seeking the highest return can find better rates elsewhere. The bonds help fund the Government’s green agenda, though locking money away for three years may be unattractive while rates and inflation remain uncertain.

GB Bank offers 5.2 per cent on a three-year bond, while NS&I’s own three-year Guaranteed Growth Bond pays 5.07 per cent. Interest on the Green Bond is paid only at maturity, which can concentrate it in one tax year: a £10,000 investment would earn £1,486 before tax, potentially leaving a basic-rate taxpayer with a £107 bill under the article’s stated assumptions. Other accounts that pay interest annually may let savers use their personal savings allowance in each tax year.