NS&I pulls guaranteed bonds after savers flock to accounts

Laura Suter, head of personal finance at AJ Bell, comments on the NS&I’s decision to pull guaranteed bonds from general sale:

“It’s no surprise that savers flocked to NS&I’s latest account in their droves – the government-backed savings provider offering the top one-year account was always going to be hugely popular. With the Bank of England’s decision to hold interest rates recently, many savers are rushing to lock in deals in the hope that we’ve hit the peak, which has meant the NS&I bonds were more popular than usual.

“The fact that the accounts were only on sale for five weeks is a cautionary tale for anyone who is waiting around before locking in a new savings deal. It means that if you’re eyeing up a particular savings account it would be best to move quickly so you can lock in that rate while supplies last.

“NS&I has had a bumpy year, seeing a summer of outflows as savers moved their money elsewhere to chase higher rates. The provider has been tasked with raising £7.5 billion of money for the government this year, but in the first five months of the tax year it had only drawn in a third of that. Typically the biggest attraction for NS&I, the draw of Premium Bonds has dwindled as savers would be giving up higher guaranteed savings rates elsewhere. But with 225,000 customers snapping up the guaranteed bonds with a minimum investment of £500 each, that will have boosted the provider closer to its target.”