UK savings: 5% interest rate deals may not last, say experts
NS&I has raised rates on its British savings bonds, with its one- to five-year growth bonds now paying up to 5.17%. The increases reflect stronger competition for savers’ money, but experts say attractive deals can disappear when providers have taken in enough deposits.
NS&I’s new growth rates are 4.99% for one year, 5.07% for two years, 5.1% for three years and 5.17% for five years. The bonds require at least £500, allow up to £1m per person in each issue, and lock money away until maturity; NS&I says its Treasury backing secures all savings. Some rivals offer higher rates, while Starling’s 5% easy-access rate is limited to eligible customers and balances up to £25,000.
- NS&I bonds now pay up to 5.17%.
- Some rival fixed-rate deals pay more.
- NS&I bonds lock money away until maturity.
New here? Start with this
National Savings & Investments (NS&I) is the government-backed savings provider in the UK. It has just raised interest rates on its fixed-term bonds, with some accounts now paying up to 5.17% per year, meaning money grows faster than it previously did.
Interest rates on savings accounts matter because they determine how much money savers earn over time. When rates are high, as they are currently, people make more money from their savings.
However, experts warn that these attractive rates are unlikely to remain permanent. Savings providers raise rates when they want to attract more customers' money, but once they have accumulated enough, they typically lower rates again.