Is it safe to use NSandI?

Popular savings products and premium bonds are offered by National Savings and Investments (NS&I)

But is it really safe?

One of the most well-known brands in the UK savings market is National Savings and Investments (NS&I). Because of its Premium Bonds, the Treasury-backed provider is well-liked.

The government-backed savings provider may be attractive for a few reasons, even though its products don't currently offer interest rates that are better than those of the best savings accounts.

Premium Bond prizes, for example, are tax-free, and although there is no assurance that you will win in the prize draw, they may be a good way to protect your savings from the taxman if you have used up all of your personal savings allowance and ISA funds.

You might be unsure if NS&I is a worthwhile investment. What do you need to know about NS&I's safety and can you trust it to manage your finances?

Is NS&I secure?

Yes, NS&I is extremely secure. Because it is supported by the UK government, namely HM Treasury, all savings are 100% guaranteed by the government. Because NS&I is essentially a branch of the government, this is the case.

A budget deficit occurs when the government's outlays exceed its revenue, forcing it to borrow funds to cover the shortfall. Usually, this borrowing is accomplished by issuing bonds or gilts. These IOUs must be repaid over a predetermined time period, typically decades, with interest. Only once, back in the 1400s, has the government failed to fulfill its obligations.

Additionally, the government borrows through NS&I. NS&I is charged with increasing a portion of the borrowing total each year when Treasury bean counters attempt to determine how much the nation will need to spend and borrow.

So why would the government use NS&I instead of issuing more gilts? Because NS&I is typically a more affordable way to raise money than the international debt markets.

Can NS&I file for bankruptcy?

NS&I is unable to file for bankruptcy because of its structure. To put savers' money at risk, the UK government would need to be in danger of going bankrupt. If that occurs, savers would face more pressing issues, such as who will foot the bill for the police and NHS.

Additionally, there is no possibility that NS&I will be acquired by a different bank or private equity firm. Because it wouldn't want to lose control of that much public debt, it is extremely unlikely that the government would choose to sell it off.

Therefore, NS&I is unable to go bankrupt or run out of funds. This implies that any savings you make with the organization are completely assured.

The standard Financial Services Compensation Scheme (FSCS) only covers 85,000 of your savings, for comparison. The PRA, or Prudential Regulation Authority, suggested increasing the deposit protection limit from 85,000 to 110,000 in March 2025. If approved, the new cap would go into effect on December 1, 2025. All financial institutions authorized by UK regulators, including banks and building societies, are subject to the FSCS.

Can I trust NS&I with my money?

NS&I is a good place to keep your money if you're concerned about the stability of other financial institutions. However, it's important to remember that NS&I has an obligation to taxpayers to maximize results while minimizing government expenses. It is under no obligation to provide the greatest savings offers.

Additionally, because of its market position, there is frequently a high demand for its products, so it does not have to work too hard to win clients by charging exorbitant interest rates. The company is under no duty to offer market-leading rates, even though it occasionally does.

Which products from NS&I are the best?

NS&I provides a variety of goods. The lineup varies periodically, and they are made to appeal to a broad spectrum of individuals. It's important to examine how these products stack up against the rest of the savings market because a reduction in the base rate might cause savings rates to decline. These are a few of the most well-liked items that NS&I currently sells.

Savings directly.

Online management is possible, and it functions similarly to other easy-access savings products. The AER for NS&I's Direct Saver is 3point 3 percent. It's worthwhile to see how the NS&I Direct Saver stacks up against the competition if you're looking for the best easy-access savings account.

Bonds for Growth Guaranteed.

Similar to other fixed-rate bonds, which are offered in "issues," this one has a set interest rate for the term of the bond. Two-year, three-point six percent AER and three-year, three-point fifty percent gross/AER guaranteed fixed bonds are available from NS&I. These bonds allow savers to invest up to £1 million per issue. After the account matures, interest is paid. To see how NS&I's fixed bonds stack up against the best fixed rate accounts available, you might want to look at them.

Bonds with guaranteed income.

Up to 3 percent AER is available with the Guaranteed Income Bonds when you fix your cash for two years, and 3 point 49 percent AER is available when you fix your cash for three years. Unlike the Guaranteed Growth Bond, interest is paid on a monthly basis instead of at the account's maturity date.

Linked savings certificates to an index.

These are extremely rare products that are offered in small quantities and are usually gone fast. They must be held for the duration of the investment, and its value fluctuates annually in accordance with the Retail Prices Index (RPI), a gauge of inflation. There will be a penalty if you choose to cash out early. Index-linked savings certificates are not available for purchase at this time.

High-end bonds.

With the potential to earn tax-free cash rewards, NS&I's Premium Bonds are among its best-selling products. You have a chance to win for every £1 you invest. You will receive 500 bonds and 500 chances to win a cash prize if you save £500. Each month, two holders of Premium Bonds win the £1 million jackpot, with cash prizes ranging from £25 to £1 million. Inflation can erode savings because Premium Bonds do not guarantee returns. To help savers look for Premium Bond prizes every month, NS&I has introduced a prize checker tool.

Check Out More National Investments and Savings.