NS&I Withdraws One-Year Bonds After Huge Demand
National Savings and Investments (NS&I) has withdrawn its one-year bonds offering an impressive interest rate of 6.2% from sale. The bonds, known as Guaranteed Growth Bonds and Guaranteed Income Bonds, were launched on August 30 and quickly gained popularity, with almost 250,000 people signing up.
NS&I’s Chief Executive, Dax Harkins, expressed his satisfaction with the success of the new one-year fixed-rate bonds, stating, “I am pleased we were able to keep them on sale for over five weeks, enabling more than 225,000 savers to benefit from the highest interest rates we have ever offered on these products.”
The high demand for these bonds comes as no surprise, as they combine a market-beating interest rate with government backing and the trusted NS&I brand. Sarah Coles, Head of Personal Finance at Hargreaves Lansdown, explained, “It’s hardly a surprise that these products flew off the shelves.”
However, the popularity of the one-year bonds also raises concerns about the availability of attractive savings options in the current market. Coles advises savers to explore options beyond the high street in order to maximize their returns. She points out that savers can still benefit from easy access rates over 5 percent.
NS&I, which is backed by the Treasury and has over 24 million customers, has withdrawn the bonds from general sale but reassures customers that it remains on track to meet its net financing target for 2023-24.
Myron Jobson, Senior Personal Finance Analyst at Interactive Investor, views NS&I’s move as a bold statement. He believes that withdrawing the bonds from sale and meeting their financing target despite the high demand “throws down the gauntlet to high street banks.”
The decision to withdraw the bonds highlights the persisting pressure on people’s cost of living, which has prevented many from saving. Coles comments on the ambitious financing target for this year, stating that it is “fairly punchy” considering the financial strain many people are facing.
NS&I’s one-year bonds have proven to be a hit among savers, offering an attractive interest rate at a time when interest rates are generally low. However, with the bonds no longer on sale, savers are encouraged to explore alternative options to make the most of their money.
More detail via Birmingham Mail here… ( Image via Birmingham Mail )