Everything you need to know about National Savings & Investments (NS&I)
National Savings & Investments (NS&I) is backed by the UK government and offers competitive interest rates. It has a range of products – from premium bonds to fixed rate accounts – which we take a look at here.
Key takeaways
One of NS&I’s most popular products are premium bonds
NS&I has the full backing of the government, suitable for those seeking guaranteed protection for their funds
Interest from NS&I savings accounts is subject to tax but often falls within the personal savings allowance (PSA)
What is NS&I?
NS&I stands for National Savings and Investments and is a government-owned bank that offers different types of savings accounts, such as easy access, fixed rate bonds, cash ISAs and premium bonds.
It is backed by HM Treasury to give those looking for a safe place for their money the peace of mind that 100% of their savings are protected.
What accounts does NS&I offer?
NS&I offers a range of products to savers, including:
What is it? An easy access account that pays interest annually. No notice is needed if you want to withdraw your money and there’s no penalty for doing so. The interest rate is not usually as competitive as other accounts where you lock your money away for a set period of time.
Minimum/Maximum holdings: Save from £1 to £2 million per person
Main benefit: Easy access to your money which is protected by the government
What is it? A guaranteed monthly income for savers, with no notice needed and no penalty for withdrawing money. You must be aged at least 16 to invest
Minimum/Maximum holdings: Save from £500 to £1 million per person
Main benefit: Pays a regular monthly amount on your savings
What is it? A cash ISA offering tax-free returns with no notice period or penalty for withdrawals
Minimum/Maximum holdings: Save from £1 to £20,000 in the current tax year
Main benefit: A tax-free way to earn a return on your savings
What is it? A way to receive a fixed rate of return by locking your money away for three years.
Minimum/Maximum holdings: Invest from £100 to £100,000
Main benefit: As well as the guaranteed return, your money is invested in green projects
What is it? A tax-free way to save for children up to the age of 18
Minimum/Maximum holdings: Invest from £1 to £9,000 in the current tax year
Main benefit: A way to encourage children to start saving and earn tax-free interest. No one can access the money until the child turns 18, at which point it becomes theirs.
Types of NS&I accounts
Direct Saver
Income Bonds
Direct ISA
Green Savings Bonds
Junior ISA
How do NS&I products work?
Accounts from NS&I work in pretty much the same way as accounts from any bank or savings provider. The exact rules around interest paid or when you can access your cash will depend on the account you open. Here are some of the general rules around NS&I products:
Choose the type of NS&I product you want to open, such as a savings account, ISA or premium bonds
Deposit your money - effectively lending it to the government to receive a return. This could be interest on your savings or tax-free prizes in the case of premium bonds
Withdraw your money when you need it, depending on the terms of the account. Some savings products are instant access. Others, such as fixed rate bonds, lock your money away for an agreed period, and apply a financial penalty if you want to get your cash out earlier
Your money is backed by HM Treasury, making it safe and secure. If you’re saving with another regulated bank, the Financial Services Compensation Scheme (FSCS) guarantees to protect the first £85,000 of your deposits
NS&I focuses solely on savings and investments, so unlike high-street banks it doesn’t offer mortgages or credit cards
Do I have to pay tax on my savings?
While tax is payable on the gross interest from NS&I savings accounts, such as Direct Saver and Income Bonds, it will fall within the personal savings allowance (PSA) of most customers.
This means you only pay tax on your savings if you earn more than £1,000 in interest (for a basic (20%) rate taxpayer) and more than £500 in savings interest (for a higher rate (40%) taxpayer). Top rate taxpayers (45%) are likely to pay tax on their savings.
There is no tax to pay on premium bonds because all prizes are paid out tax-free. NS&I Direct ISAs are also free of tax up to the annual ISA limit (£20,000 for the 2024/25 tax year).
How do I buy Premium Bonds?
You can buy Premium Bonds from NS&I’s website, using its secure online system. You will just need to have your debit card details handy.
You can also buy them over the phone, or complete an application form and send it along with a cheque payable to NS&I
You buy bonds in £1 denominations, but each investment must be at least £25. The more bonds you buy, the more your chances of winning improve, with winning amounts ranging from £25 to £1million.
You must be over 16 to save in premium bonds, but they can be held in the name of under-16s by parents or guardians.
Premium bonds are drawn on the first working day each month and you need to have held each bond for a full month before you can win.
You can check if you have won through the NS&I website
Is NS&I safe?
NS&I is a ‘government savings bank’, so it can offer you a greater level of protection when it comes to your savings. Most other banks are protected by the FSCS, while NS&I is backed by HM Treasury.
Unlike the FSCS maximum limit of £85,000 per person per institution, with NS&I every penny you invest is protected if something goes wrong. However, while you can’t ‘lose money’ you can see the value of your savings erode if the level of inflation is higher than the interest you receive, for example. This is true of savings accounts with any provider – not just NS&I.
You can’t lose money in premium bonds either. But you’ll earn zero interest – so you need to be successful in the monthly prize draws to see a return on your money.
Personal Finance & Insurance Expert
Our expert says...
“If you’re looking for a safe home for your savings, you can’t go wrong with NS&I which is one of the most protected places for your cash. However, up to £85,000 will still be protected with any other financial institution so the key thing you should be looking at is how much interest is paid, and if the account is right for you.”
Other useful guides
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Compare savings accounts with MoneySuperMarket
NS&I is not the only option for savings. You can view savings accounts from a range of leading providers with MoneySuperMarket and compare what’s on offer to see which are the most suitable for your needs.
Whether you’re looking for easy access, fixed rate, regular savings or ISAs, we’ll show you the options with the highest interest rates. What’s more you can also compare the minimum and maximum deposits too, as well as any notice periods and how you will be able to manage the account.