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Savers can now secure a guaranteed return of 4.73 per cent for three years through a new Government-backed bond.
The improved rate is available from today, although customers must lock away their money for the full term without access to early withdrawals.
NS&I has launched Issue 10 of its Green Savings Bonds, raising the fixed rate from the 4.45 per cent offered by Issue 9 in June.
Customers can invest between £100 and £100,000, with the rate fixed at 4.73 per cent gross/AER for three years.
The bonds are designed for people who want to earn a guaranteed return while supporting environmental projects across the UK.
Money raised is allocated to green Government initiatives through the UK Government Green Financing Framework.
Green Savings Bonds operate alongside green gilts as part of the Government’s wider environmental funding programme.
Andrew Westhead, NS&I’s retail director, said: “Green Savings Bonds provide savers with guaranteed returns while supporting green government projects across the UK.
“I am pleased that we’ve been able to offer savers looking to support green projects an improved rate of 4.73% gross/AER on new Bonds on sale from today.”
The latest issue comes five years after Green Savings Bonds were first launched in 2021.
Customers must be aged at least 16, while bonds can be held individually or jointly.
Money cannot normally be withdrawn before the three-year term ends. However, customers receive a 30-day cooling-off period after buying the bonds, during which they can cancel their investment.
Interest is calculated daily and added once a year on the anniversary of the investment.
The final payment is made when the bond matures.
No tax is deducted automatically, but the interest is taxable when the bond matures and counts towards the saver’s Personal Savings Allowance.
As with all NS&I products, the full amount deposited is backed by HM Treasury. This means every penny invested is protected, regardless of what happens in financial markets.
NS&I is among the largest savings providers in the country, serving more than 24 million customers.
The funding raised through Green Savings Bonds sits outside NS&I’s annual Net Financing target, which is set by HM Treasury.
Instead, the level of annual funding required through the bonds is agreed separately between the Treasury and NS&I.
The bonds work in tandem with green gilts issued by the Debt Management Office to meet the government’s green financing requirements.
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