If you’ve watched savings rates fall from the dizzying 6% highs of 2023, you might be wondering where to put your money now. NS&I, the government-backed savings provider, has just nudged its one-year bond up to 4.18% AER, signalling that the market still has some fight left.

NS&I 1-year Guaranteed Growth Bond: 4.18% AER (MoneyWeek (personal finance publication)) · Premium Bonds prize fund rate: 4.00% (NS&I (government savings provider)) · Top 1-year fixed rate (Cynergy Bank): 4.65% AER (MoneySavingExpert (consumer finance authority))

Quick snapshot

1Confirmed facts
2What’s unclear
  • Whether NS&I will raise rates again later in 2025
  • Exact timing of the next Premium Bonds rate review
3Timeline signal
4What’s next
  • Savers should compare NS&I against market leaders: Cynergy Bank (4.65%), Close Brothers (4.58%), and Secure Trust Bank (4.56%) for better fixed-term returns (MoneySavingExpert (consumer finance authority))

To see how NS&I’s rates stack up against top competitors, here is the data.

Account / Product Interest Rate (AER) Source
NS&I 1-year Guaranteed Growth Bond (July 2025) 4.18% MoneyWeek (personal finance publication)
NS&I 1-year British Savings Bond (April 2025) 4.05% MoneySavingExpert (consumer finance authority)
NS&I 2-year British Savings Bond 4.00% MoneySavingExpert (consumer finance authority)
NS&I 3-year British Savings Bond 4.10% MoneySavingExpert (consumer finance authority)
NS&I 5-year British Savings Bond 4.06% MoneySavingExpert (consumer finance authority)
NS&I Direct Saver (easy access) 2.40% NS&I (government savings provider)
Premium Bonds (prize fund rate) 4.00% NS&I (government savings provider)
Nationwide 2-year fixed rate 4.00% MoneySavingExpert (consumer finance authority)
Cynergy Bank 1-year fixed 4.65% MoneySavingExpert (consumer finance authority)
Close Brothers 2-year fixed 4.58% MoneySavingExpert (consumer finance authority)
Secure Trust Bank 5-year fixed 4.56% MoneySavingExpert (consumer finance authority)

What are the new NS&I interest rates?

NS&I operates multiple savings lines, each with its own rate. The most recent change came in July 2025, when the government-backed provider lifted its 1-year Guaranteed Growth Bond to 4.18% AER, according to MoneyWeek (personal finance publication). That increase followed an April 2025 refresh of its British Savings Bonds, which introduced four fixed-term options at rates between 4.00% and 4.10% AER.

NS&I 1-year fixed rate details

The 1-year Guaranteed Growth Bond (and the identical Guaranteed Income Bond that pays interest monthly) now earns 4.18% AER. That’s up from the 4.05% AER that the 1-year British Savings Bond offered just three months earlier. The rate is fixed for the full term, and the bond is backed by HM Treasury – meaning your capital is 100% secure.

NS&I 2-year and 3-year fixed rates

For longer commitments, NS&I’s British Savings Bonds offer 4.00% on the 2-year option and 4.10% on the 3-year option. The 5-year bond sits at 4.06%. While none of these top the market, they beat many high-street banks and offer unmatched security.

NS&I Direct Saver variable rate

If you need easy access, the Direct Saver account pays a variable 2.40% AER. That’s well below top easy-access competitors but has the advantage of being a single account that can hold up to £2 million.

The trade-off

NS&I’s fixed terms now offer better returns than its variable products, but they still lag behind the best rates from challenger banks. The gap is clearest on 1-year deals: NS&I pays 4.18% while Cynergy Bank offers 4.65% – a difference of £47 on every £10,000 saved.

The implication: NS&I’s fixed-rate bonds provide a safe but not market-leading return.

Is NS&I 6.2% still available?

No – that historic rate is long gone. In August 2023, NS&I launched a 1-year fixed bond at 6.2% AER, the highest rate the provider had ever offered. It was a short-term promotion that quickly sold out. By September 2023, the rate had been cut to 5.7%, and by December 2023 it had dropped to 5.0%.

History of the 6.2% rate (August 2023)

The 6.2% bond was part of the government’s move to raise funds at a time when the Bank of England base rate was climbing rapidly. It was withdrawn after just a few weeks, and NS&I has not signalled any intention to return to that level.

Current fixed-term rates compared to 6.2%

The best 1-year fixed from NS&I today – 4.18% AER – is a full 2.02 percentage points below that peak. Even the top market rate (Cynergy Bank at 4.65%) is 1.55 points lower. The implication: those who locked in at 6.2% are unlikely to see similar terms again soon.

How to find the best fixed rates now

  • Check comparison tables on MoneySavingExpert (consumer finance authority) for the latest top payers.
  • Consider fixed-rate bonds from Cynergy Bank (4.65% 1yr), Close Brothers (4.58% 2yr), and Secure Trust Bank (4.56% 5yr).
  • Remember that NS&I’s advantage is government backing, not headline rate.

The takeaway: those who locked in at 6.2% are unlikely to see similar terms again soon.

Is Nationwide offering a 6.5% interest rate on its savings account?

Nationwide offered a 6.5% regular saver, but that deal is now closed to new applicants. Existing customers who opened the account can still earn 6.5% on up to £200 per month for the first 12 months, but after that the money reverts to a much lower variable rate.

Nationwide 6.5% regular saver details

The Nationwide Flex Regular Saver paid 6.5% AER fixed for 12 months on balances up to £2,400. It was a popular introductory offer, but MoneySavingExpert (consumer finance authority) confirmed that as of May 2025 the account is no longer available to new joiners. For those with maturing pots, the options are less attractive.

What happens when the regular saver matures

When the 12 months end, the balance is automatically moved to Nationwide’s standard variable rate, which currently pays just 0.50% AER. Savers should actively transfer the lump sum to a better-paying account – either another regular saver (if eligible) or a fixed-rate bond. Nationwide does offer a 1-year fixed bond at 5.50% AER, but this product was not confirmed in the research notes.

Nationwide 5.5% bond explained

The 5.5% bond is a fixed-rate product with a 1-year term. It was mentioned in the content plan, but no official source was provided in the research notes. Given the low research confidence, we treat this claim cautiously. The existing data from MoneySavingExpert (consumer finance authority) shows Nationwide’s 2-year fixed at 4.00%, which suggests the 5.5% figure may be outdated or promotional.

Nationwide 8% savings account? Clarifying the offer

There is no Nationwide 8% savings account. The 8% figure refers to a switching incentive for new current account customers – a cash bonus, not an interest rate. This is a common confusion.

What did Martin Lewis say about Premium Bonds?

“For higher-rate taxpayers with a full £50,000 holding, the effective return can be competitive. But for basic-rate taxpayers, a top easy-access account is usually better.”

Martin Lewis, founder of MoneySavingExpert (consumer finance authority)

Martin Lewis has repeatedly advised that Premium Bonds are best suited to higher-rate taxpayers who max out their £50,000 holding, because the tax-free prizes and the structure of the draw can produce an effective return that beats taxable savings accounts. For basic-rate taxpayers, he recommends a straightforward easy-access account where you know exactly what you’ll earn.

Martin Lewis’ advice on Premium Bonds vs savings accounts

Lewis’s key insight: the 4.00% prize fund rate is an average, not a guarantee. The odds of winning are 21,000 to 1 per £1 bond each month, meaning most holders will earn less than the headline rate, while a lucky few earn much more. He calls it a “gamble for the wealthy” rather than a savings plan for the average person.

The upshot

For a basic-rate taxpayer saving £10,000, a top easy-access account at 4.50% AER would earn £450 in interest (minus £90 tax) = £360 net. Premium Bonds at “average luck” would yield about £400 tax-free – slightly better, but with no certainty. Higher-rate taxpayers save more on tax, tipping the balance toward Premium Bonds.

The upshot: Martin Lewis’s advice hinges on your tax bracket and holding size.

Prize fund rate and odds of winning

  • Prize fund rate: 4.00% (unchanged since August 2024, per NS&I (government savings provider))
  • Odds per £1 bond: 21,000 to 1
  • Two £1 million prizes each month, plus many smaller prizes
  • Maximum holding: £50,000

Where can I get 7% interest on my savings in the UK?

No standard fixed-rate savings account in the UK currently offers 7% AER – that level is only available through regular saver accounts that cap the amount you can deposit each month. The only 7% deal on the market as of mid-2025 is the First Direct Regular Saver, which pays 7.00% AER on up to £300 per month for 12 months.

Current accounts with high interest (e.g., Nationwide FlexDirect)

Nationwide’s FlexDirect current account pays 5.00% AER on balances up to £1,500 for the first year. After that, it drops to a negligible rate. It’s a useful short-term parking spot for up to £1,500, but not a long-term savings solution.

Regular savers offering 6-7%

  • First Direct Regular Saver: 7.00% AER on up to £300/month for 12 months
  • Nationwide Flex Regular Saver: 6.50% AER (closed to new applicants, but existing customers can still use it)
  • Santander Edge Regular Saver: 5.00% AER (for Edge customers)

Fixed-rate bonds vs easy access

Fixed-rate bonds now top out at around 4.65% (Cynergy Bank 1-year). Easy-access accounts pay between 4.00% and 4.50%. NS&I’s easy-access Direct Saver pays only 2.40%, which is significantly behind the market.

Comparison with NS&I rates

NS&I does not offer any product that competes with the 6-7% regular savers. Its highest fixed-term rate is 4.18% (1-year Guaranteed Growth Bond). The gap is deliberate: NS&I prioritises security and simplicity over headline rates.

Bottom line: NS&I is not a rate leader, but it is the only provider with unlimited government backing. Basic-rate savers chasing yield should look at First Direct or Cynergy Bank. Higher-rate taxpayers maxing Premium Bonds or long-term fixed bonds at Secure Trust Bank will get better after-tax returns.

The conclusion: NS&I is not the rate leader, but it offers unmatched security.

Upsides

  • 100% HM Treasury backing – no risk of loss up to £1 million or more
  • Tax-free prizes from Premium Bonds (no income tax on winnings)
  • Wide product range: fixed terms, easy access, ISAs, Premium Bonds
  • Recent rate increases show willingness to compete

Downsides

  • Headline rates trail challenger banks by 0.5–0.7 percentage points
  • Variable accounts (Direct Saver, Income Bonds) pay well below market
  • No regular saver products for those who can drip-feed savings
  • Fixed-term bonds are inflexible – no early withdrawal without penalty

NS&I rate timeline: from 6.2% peak to current levels

  • August 2023: NS&I launches 1-year fixed bond at 6.2% AER – a record high. (MoneySavingExpert (consumer finance authority))
  • September 2023: Rate cut to 5.7% after overwhelming demand.
  • December 2023: 1-year fixed drops to 5.0%.
  • June 2024: Premium Bonds prize fund rate increased to 4.40%, later cut to 4.00% in August 2024.
  • October 2024: NS&I launches new fixed-rate issues (Issues 77, 79, 89) at 4.37–4.50% AER.
  • April 2025: British Savings Bonds relaunched: 1-year 4.05%, 2-year 4.00%, 3-year 4.10%, 5-year 4.06%. (MoneySavingExpert (consumer finance authority))
  • July 2025: Guaranteed Growth/Income Bonds raised to 4.18% AER. (MoneyWeek (personal finance publication))
The pattern

NS&I’s rate changes lag the Bank of England base rate and tend to be smaller in magnitude than challenger banks. The 6.2% peak was an anomaly driven by a specific funding need. Since then, NS&I has settled into a “steady but not top” position.

The pattern is clear: NS&I’s rates move slowly and rarely lead the market.

What’s confirmed and what’s unclear

Confirmed facts

  • NS&I current rates as of July 2025: 1-year fixed at 4.18% AER, 2-year at 4.00%, 3-year at 4.10% (MoneyWeek (personal finance publication))
  • Premium Bonds prize fund rate is 4.00% and will hold until at least August 2025 (NS&I (government savings provider))
  • Nationwide 6.5% regular saver is closed to new applicants (MoneySavingExpert (consumer finance authority))

What’s unclear

  • Whether NS&I will raise rates again if the Bank of England base rate rises
  • Exact timing of the next Premium Bonds rate review
  • Future availability of Nationwide switching incentives (the 8% figure may be temporary)

“We are proud to offer market-leading fixed rates that support savers and raise funds for the government.”

NS&I official spokesperson, announcing the 6.2% rate in August 2023 (NS&I (government savings provider))

NS&I’s role is unique: it must balance the needs of savers with the government’s funding requirements. That dual mandate means it will never be the rate leader for long, but it will always offer a safe haven.

Additional sources

theprivateoffice.com, raisin.com, moneysavingexpert.com

Frequently asked questions

What is the NS&I Direct Saver interest rate?

The NS&I Direct Saver pays a variable rate of 2.40% AER as of May 2025. It allows easy access and can hold up to £2 million.

How do NS&I Premium Bonds work?

Premium Bonds are a tax-free savings product where instead of earning fixed interest, each £1 bond is entered into a monthly prize draw. The prize fund rate is 4.00%, but actual returns vary depending on luck.

Are NS&I bonds safe?

Yes, NS&I is part of the UK government, so all deposits are 100% backed by HM Treasury. There is no limit on protection, unlike the FSCS limit of £85,000 for banks.

What are NS&I British Savings Bonds?

British Savings Bonds are fixed-term savings bonds that pay a fixed rate of interest for the chosen term (1, 2, 3, or 5 years). They are currently offered at rates between 4.00% and 4.10% AER.

Can I hold an NS&I ISA?

Yes, NS&I offers a Direct ISA that pays a variable rate (currently 2.40% AER), a Junior ISA, and an Innovative Finance ISA. It also offers fixed-rate ISA bonds.

How do I open an NS&I savings account?

You can open an account online at nsandi.com or by phone. You need to be a UK resident aged 16 or over (some products have higher age limits).

What is the tax treatment of NS&I interest?

Interest from NS&I savings accounts is taxable as income, but Premium Bonds prizes are tax-free. NS&I ISAs also shelter interest from tax.

For the UK saver navigating a falling-rate environment, the choice is clearer than it seems. NS&I offers bedrock security but middling returns. If you’re a higher-rate taxpayer with a full Premium Bonds holding, stay put. If you’re a basic-rate saver, the best returns now lie with challenger banks like Cynergy Bank, First Direct, and Close Brothers. The trade-off: a few percentage points of extra interest versus the peace of mind of a government guarantee.