National Savings and Investments (NS&I) has announced the launch of a new issue of its Green Savings Bonds, offering a generous interest rate of 5.7% over a three-year period. This marks a significant increase from the initial launch in October 2021, when it offered a meager 0.65% interest rate. The previous issue of the bonds paid 4.2%, so this new rate represents a 1.5 percentage point increase.
Investors can start their Green Savings Bond journey with a minimum investment of £100, with a maximum limit of £100,000 per person per issue. 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.
To purchase a Green Savings Bond from NS&I, investors must be aged 16 or over. The introduction of this new issue has propelled the bonds to a higher position on the list of best buy fixed-rate bonds, climbing an impressive 50 places compared to the previous issue. Dax Harkins, the CEO of NS&I, expressed delight in offering this new issue at a higher rate, emphasizing the opportunity for savers to earn a guaranteed return on their investment while contributing to a greener and more sustainable world.
In terms of comparison with other available options, Recognise Bank currently offers the best three-year fixed-rate bond with a rate of 6.05%. This account requires a minimum deposit of £1,000 and has a maximum deposit limit of £85,000. Savings Guru predicts that this product will only be available for a limited time, so interested savers should act promptly. Once opened, savers have 30 days to fund the account.
Several other banks, including RCI Bank, Hodge Bank, and Blme, offer a three-year fixed-term bond with a 6% interest rate. These banks require a minimum deposit of £1,000 and have a maximum limit of £1,000,000.
Green Savings Bonds are savings accounts provided by NS&I, a Treasury-backed bank. The funds deposited into these accounts are utilized to finance various government infrastructure projects focused on promoting environmental sustainability. The first issue of Green Savings Bonds was launched on October 22, 2021, and has since attracted over £915 million in investments. However, this amount falls short of the £15 billion target.
The initial issue of the bonds offered a meager 0.65% interest rate, which received criticism from experts due to its low rate and relatively short fixed term. Subsequent issues saw an increase in interest rates, with the most recent announcement raising it to 5.7%. For a £10,000 investment, savers can expect a maturity interest of £1,860 with the new rate. In comparison, the first issue would yield a mere £197 in interest for the same amount. It’s important to note that unlike some other NS&I products, the interest earned on Green Savings Bonds is taxable.
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