Can I get a better rate anywhere else?
Absolutely. As MoneySavingExpert.com (MSE) founder Martin Lewis points out, you can currently beat the Green Savings Bond interest rate of 0.65% with a single Cynergy Bank access account by 0.66% that you don’t have your money for have to lock away 3 years.
If you are ready to fix, you can comfortably beat the 0.65% interest rate on the Green Savings Bond. SmartSave’s best one-year and two-year fixes currently pay 1.34% and 1.58%, respectively (a minimum of £ 10,000).
If you can lock in money for the full three years, you can earn 1.81% (£ 1,000 minimum) with JN Bank – that’s almost three times the interest rate you would earn on the Green Savings Bond over the same period. All of these accounts can be opened online.
For more information on savings accounts, including a breakdown of the best interest rates, see our guide to the best savings accounts.
Who is this bond for, exactly?
If the return on investment you get is your main concern, better deals out there. As Martin puts it, with an interest rate this low, this is a savings product for those who put morality above money. While there are limited options for savers looking to invest their money to support green projects, this is a decent option if that is your top priority and you don’t care about maximizing your savings rates.
For a full summary of the Green Savings Bond, as well as information on other providers offering “green” savings products, see our complete Green Savings Bond Guide.
How does the green savings bond work?
If the interest rate hasn’t put you off and you’d like to use your money to support green projects, here’s the full information on NS & I’s new bond:
- Green savings bonds are sold in the form of three-year fixed bonds, which means you’ll have to lock up your money for that period – although you have 30 days to change your mind.
- The bonds are available to savers aged 16 and over.
- The bonds can be bought and managed online.
- The bonds will be sold until at least January 22, 2022.
- You can save between € 100 and € 100,000.
- The bonds will be available both individually and collectively.
- Interest is paid annually on the anniversary of the account opening.
- Interest is taxable, which means it counts towards your personal savings allowance – although most savers are not affected.
Are my savings safe with the green savings bond?
These bonds are operated by NS&I, which is not a bank but is supported by the Treasury Department. This means your cash is 100% safe up to the £ 100,000 limit (unless the UK goes bankrupt).
The savings protection is not limited to NS&I. Every UK regulated savings account offers up to £ 85,000 protection per person per institution. Read our full article Are Your Savings Safe? Guide to more information on protecting savings.
How can I buy the green savings bond?
The Green Savings Bond is offered exclusively by NS&I, which essentially acts as the state’s bank. The bonds can only be bought and managed online on the NS&I website.
Perhaps you already know NS&I for offering Premium Bonds, the UK’s largest savings product. Premium bonds are a savings account into which you can deposit money (and withdraw money at any time), where the interest paid is determined by a monthly raffle and not by a fixed interest rate. For a full breakdown, see our guide to premium bonds.