NS&I has brought back its green savings bond, offering savers a three-year fixed rate at 3.82%.
The account can be opened by anyone aged 16 or over with a minimum investment of £100 while the maximum amount you can hold is £100,000.
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Is the NS&I green savings bond worth it?
NS&I is 100% secure, so any money held in a green savings bond will be protected. You might find it reassuring knowing your savings are funding green projects across the UK too.
However, you can currently get more competitive rates from a number of other banking providers.
Rachel Springall, finance expert at data firm Moneyfactscompare, said: “This latest offering from NS&I will likely be an enticing choice for savers who are content to lock their cash away for three years.
“However, the rate can be beaten by alternative brands, as many of the top rate deals pay 4.5% or more.”
The best green savings account rate is with Castle Trust Bank. Its three-year fixed rate e-Cash ISA pays a 4.42% interest rate.
Savers can open one of the accounts online via the bank’s website. You can make withdrawals before the end of the three-year term, but you will be hit with early exit charges.
Castle Trust Bank is also offering savers a three-year fixed rate e-Saver paying 4.21%, with any interest earned taxable.
Again, savers can open one of the accounts online and early withdrawals come with an early exit fee.
Castle Trust plants a tree when either of these two accounts are opened and the minimum investment of £1,000 is made within 14 days.
Tandem Bank and Gatehouse Bank also have three-year green fixed savings accounts, which pay 4% and 3.85%, respectively.
|
Provider |
Account |
Account Type |
Gross interest (on £100K) |
|
Castle Trust Bank |
Fixed Rate e-Cash ISA (Three Year) |
Cash ISA |
4.42% |
|
Castle Trust Bank |
Fixed Rate e-Saver (Three Year) |
Fixed |
4.21% |
|
Tandem Bank |
3 Year Fixed Saver |
Fixed |
4% |
|
Tandem Bank |
Fixed Rate Cash ISA (Three Year) |
Cash ISA |
4% |
|
Gatehouse Bank |
3 Year Fixed Term Woodland Saver |
Fixed |
3.85% |
|
National Savings & Investments |
NS&I Green Savings Bonds Issue 8 (Three Year) |
Fixed |
3.82% |
Credit: Moneyfactscompare
All of these alternative savings accounts offering better rates than NS&I (as of 15 April) allow savers to have holdings of £100,000.
What is a green savings account?
A savings account is usually green if the banking provider has committed to putting your funds towards environmentally-friendly purposes or not using them to fund industries relying on carbon-emitting industries such as fracking.
For example, Triodos Bank uses money added to its savings accounts to fund sustainable and environmentally-friendly projects across the UK.
Meanwhile, other banks like Gatehouse Bank plant trees for every account that is opened and funded with it.