Can I get a better interest rate elsewhere?
Absolutely. As MoneySavingExpert.com (MSE) founder Martin Lewis points out above, you can currently match the Green Savings Bond interest rate of 0.65% with an easy access account from Coventry Building Society, which doesn’t require you to lock away your cash for three years.
If you are willing to fix, you can comfortably beat the Green Savings Bond’s 0.65% rate. The top one-year fix from Investec currently pays 1.33% (min £5,000), while the top two-year fix from Zenith Bank UK pays 1.57% (min £1,000).
If you can lock money away for the full three years, you can earn 1.81% with JN Bank (min £1,000) – that’s nearly three times the rate you’d earn with the Green Savings Bond over the same time period. All of these accounts can be opened online.
For more on savings accounts, including breakdowns of the best rates, see our Top Savings Accounts guide.
So who exactly is this Bond for?
As Martin puts it, with such a poor interest rate this is a savings product for those who put morals over money. Though with limited options out there for savers looking to invest their cash to support green projects, if that’s your main priority and you’re not fussed about maxing out your savings interest, it’s a decent option.
For a full summary of the Green Savings Bond, plus information about other providers that offer ‘green’ savings products, see our full Green savings bond guide.
How does the Green Savings Bond work?
If the interest rate hasn’t put you off and you’re keen to use your cash to support green projects, here’s the full lowdown on the new bond from NS&I:
- Green savings bonds are sold in the form of three-year fixed bonds, which means you’ll need to lock your cash away for this period of time – though you’ll have a 30-day cooling off period to change your mind.
- The bonds are available to savers aged 16 and over.
- The bonds are available to buy and manage online.
- The bonds will be on sale until at least 22 January 2022.
- You can save between £100 and £100,000.
- The bonds will be available both individually and jointly.
- Interest will be paid annually on the anniversary of the account opening.
- Interest will be taxable, which means it’ll count towards your Personal Savings Allowance – though most savers won’t be affected by this.
Are my savings safe with the Green Savings Bond?
These bonds are operated by NS&I, which rather than being a bank is backed by the Treasury. This means your cash is 100% safe up to the £100,000 limit (unless the UK goes bust).
However, savings protection isn’t unique to NS&I. Every UK-regulated savings account offers protection of up to £85,000 per person, per institution. Read our full Are Your Savings Safe? guide for more on how savings are protected.
How can I purchase the Green Savings Bond?
The Green Savings Bond is exclusively offered by NS&I, which essentially operates as the Government’s bank. The bonds will only be available to buy and manage online from the NS&I website.
You might already know NS&I for offering Premium Bonds, the UK’s biggest savings product. Premium Bonds are a savings account you can put money into (and take out when you want), where the interest paid is decided by a monthly prize draw rather than a fixed rate. For a full breakdown check out our Premium Bonds guide.
