NS&I

Who they are

NS&I - National Savings and Investments - is a state-owned savings bank and a non-ministerial government department and executive agency of HM Treasury. It was founded by the British government in 1861 as the Post Office Savings Bank, the world's first postal savings system. Its aim has always been to attract funds from individual savers to help fund the government's deficit. Today it looks after savings for around 24 million customers.

The thing that sets NS&I apart from every other savings provider is its guarantee. 100% of any individual's savings are guaranteed by HM Treasury. There is no cap - every penny is covered, regardless of the amount. This is not FSCS protection; it is a full government guarantee, which means there is no ceiling to worry about.

Savings accounts

NS&I offers a varied range. The flagship is Premium Bonds, which currently carry a prize fund rate of 4.35% - but that figure needs careful reading. It is not an interest rate you personally earn. It is the average payout spread across all bondholders, skewed upward by large prizes. The minimum is £25 and you can hold up to £50,000, with prizes paid tax-free. Each £1 bond carries odds of 22,000 to 1 per draw.

For straightforward variable-rate saving, the Direct Saver and Income Bonds both pay 3.75%. The Direct Saver starts from £1; Income Bonds need a £500 minimum. The Direct ISA offers 3.80% tax-free on a Cash ISA with instant access from £1. For children, the Junior ISA pays 3.70% and is locked until age 18.

If you are happy to fix, the Guaranteed Income Bonds range currently spans 4.81% for two years up to 4.85% for five years, all with a £500 minimum and no access before maturity.

Is it right for you?

NS&I is probably most compelling for three types of saver. First, anyone holding a large cash sum - whether from a house sale, inheritance, or similar - who wants total peace of mind without thinking about protection limits. Second, higher and additional-rate taxpayers who have used their ISA allowance and Personal Savings Allowance, for whom tax-free Premium Bond prizes genuinely compete with taxable interest elsewhere. Third, parents looking for a simple, fully government-backed Junior ISA.

If you are a basic-rate taxpayer with savings under your allowance threshold, the honest truth is that top easy-access accounts and cash ISAs from other providers often beat NS&I on rate - and your money is just as safe up to £120,000 under FSCS. NS&I does not do current accounts or switch offers, so it works best alongside other providers rather than as a full banking replacement.

Check the live rates on this page before you decide - NS&I's variable accounts can move, and the fixed-rate bonds are worth comparing against the broader market at the time you are ready to commit.