NS&I drastically reduced savings limit on its bonds from £1 million to £10,000

November 8th, 2019
NS&I

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NS&I which is backed by the government has reduced the amount customers can put into their fixed savings account from £1 million to £10,000

Customers can now only invest £10,000 into each of the 1 and 3 year Guaranteed Income Bonds and Guaranteed Growth Bonds, meaning a max saving of £40,000.

The interest on the savings have remained the same and given many people choose to save with the firm was due to the guaranteed savings rate on a notional of £1 million, this move will be widely unwelcomed.

What has changed exactly?

NS&I’s Guaranteed Income Bonds continue to provide a 1.46% and 1.92% return on their one and three year contracts. They also continue to offer 1.5% return on the one year and 1.95% on the three year for their Guaranteed Growth Bonds.

Overall the only difference is the huge reduction on the amount customers can invest safely into the guaranteed funds. As it already stands, under the Financial Services Compensation Scheme (FSCS), UK accounts are protected by up £85,000 per institution so customers will now wonder if they should stick with NS&I or find an alternative savings option.

Comments from NS&I

Retail director of NS&I, Jill Waters commented that the guaranteed products have been “extremely popular”

She continued to say, “We are pleased to have given savers over six months to invest larger amounts, but these changes to the investment limit will allow us to manage demand in order to achieve our net financing target for 2018-19, while continuing to deliver positive value to taxpayers.”

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