Reacting to “Government-backed NS&I's new fixed-rate savings now pay up to 4.75% interest – close to topping the tables”, published by MoneySavingExpert on 31 July 2026 and updated on 4 August 2026. We have checked every rate below against NS&I's own product pages on 5 August 2026.
Here is our view, before the detail: this is a genuinely decent set of rates, and the way most people will use them is the wrong way round. The number that will pull the eye is the five-year at 4.75%, because it is the biggest on the page. It is also the one carrying an access problem, a thin reward for the extra commitment, and a tax quirk that can quietly cost a basic-rate taxpayer several hundred pounds. The one-year at 4.72% is three hundredths of a percentage point behind and dramatically easier to live with.
The broader point matters more than NS&I. Savers have spent three years being trained to shop on headline rate alone. With Bank Rate held at 3.75% and cash paying close to 5%, the difference between a good decision and a bad one is now almost never the rate. It is whether the money is in the right wrapper, and whether you can actually reach it.
What actually changed
NS&I increased all four Guaranteed Growth Bonds. The rates confirmed on nsandi.com on 5 August 2026, with the previous rates as reported by MoneySavingExpert:
- One year (Issue 91): 4.72% gross/AER, up from 4.69%
- Two years (Issue 79): 4.70%, up from 4.67%
- Three years (Issue 81): 4.68%, up from 4.65%
- Five years (Issue 73): 4.75%, up from 4.55%
Minimum £500, maximum £1 million per person in each Issue. Interest is fixed for the term, added to the Bond each anniversary rather than paid out, and there is no early access at all beyond a 30-day cancellation window.
Notice the shape. The one-year pays more than the two-year, which pays more than the three-year — and then the five-year jumps back above all of them. That inversion is the market saying it expects Bank Rate to be meaningfully lower in a few years than the 3.75% the Bank of England held it at on 30 July 2026. A provider offering to pay you 4.75% fixed until 2031 believes that will look expensive to you, not to them. It is a forecast, not a favour.
0.03percentage points — the entire extra return for locking your money up for five years instead of one (4.75% vs 4.72%)
The tax trap buried in the five-year
NS&I's own wording is the important bit: interest is added without tax deducted, but it counts towards your Personal Savings Allowance in the tax year the Bond matures. On a five-year Bond, five years of compounded interest arrives in a single tax year's allowance.
Putting real numbers on it. Take £20,000 in the five-year Bond at 4.75%, held to maturity, for a basic-rate taxpayer with no other savings interest. Over five years it grows to £25,223, so the interest is £5,223 — and all of it is taxable in the maturity year. The Personal Savings Allowance covers the first £1,000, leaving £4,223 taxed at 20%: a tax bill of £845.
Now compare that with the same interest arising year by year, as it would on a rolling one-year fix. Year one earns £950 and year two £995 — both inside the £1,000 allowance, so no tax at all. Years three, four and five creep over it and generate £8, £18 and £29. Total tax across the five years: £56.
Same money, same rate, same five years — £845 of tax instead of £56. The maturity-year bunching costs roughly £789, which turns a headline 4.75% into about 4.04% a year after tax. That is now clearly worse than simply taking the one-year at 4.72% and renewing. (Illustrative: assumes a basic-rate taxpayer with no other savings interest and unchanged allowances; your own position will differ.)
For a higher-rate taxpayer it is sharper still, because the allowance is £500 and the rate is 40% — £1,889 of tax on that same £5,223. Additional-rate taxpayers get no Personal Savings Allowance at all.
The safety premium most households no longer need
NS&I's pitch has always been Treasury backing: your money is protected in full, with no ceiling. That is true, and for someone holding several hundred thousand pounds in cash it is worth paying for.
For everyone else, the maths changed on 1 December 2025, when the Financial Services Compensation Scheme limit rose from £85,000 to £120,000 per eligible person, per banking group. If you hold less than £120,000 with any one group, your money is already protected in full at an ordinary UK-authorised bank or building society. You are not buying extra safety by going to NS&I. You are buying safety you already had.
And it is not free. MoneySavingExpert's round-up on 4 August 2026 listed the top one-year fix elsewhere at 4.91% and the top five-year at 5%. On £50,000, that one-year gap of 0.19 percentage points is £95 a year. This is not a recommendation of any provider — rates move constantly and need checking before you act — but it is the price of a guarantee that, below £120,000, duplicates one you have anyway.
What this means for a real household this week
Suppose a household has £26,000 sitting in a current account and an easy-access savings account, earning very little. The instinct after reading a headline like this is to move the lot into the five-year at 4.75%. That would be a mistake on three counts: the emergency fund would become unreachable, the tax bunching would land in 2031, and the ISA allowance would go unused.
The order that actually works is boring and it is not about the rate. First, decide how much must stay reachable — for most households three to six months of essential outgoings, which is the sum our emergency fund calculator works through. That money does not get fixed, full stop. Second, look at the wrapper before the rate: the ISA allowance for the 2026 to 2027 tax year is £20,000, and interest inside a cash ISA is not taxed at all, so the £845 problem above simply does not arise. Third, and only third, fix what is genuinely surplus — and prefer the term you can actually live with.
Run the same £20,000 inside a cash ISA at 4.75% and you keep the full £5,223. The wrapper decision is worth £845; the rate decision between 4.72% and 4.75% is worth about £30. People spend hours on the second and minutes on the first. ISAs explained, in plain English covers what an ISA actually is and how the allowance works.
Two things worth doing this week
1. Check what your existing savings are actually paying. Not the account you opened at a good rate two years ago — what it pays today. Old easy-access accounts routinely drift down after the introductory period ends, and a household with £26,000 in an account paying 1.5% instead of something near 4.7% is losing over £800 a year without doing anything wrong. Log in and look at the rate on the account, then compare it against the current market using an independent comparison site such as MoneyHelper's free savings guidance, which is government-backed and sells nothing.
2. Check whether you have used this year's ISA allowance. The £20,000 allowance for 2026/27 does not carry forward — if you do not use it by 5 April 2027 it is gone permanently. For anyone with meaningful cash savings and a full Personal Savings Allowance, filling the ISA first is usually the highest-value thing available, and it costs nothing but the ten minutes it takes to open one.
If money is tight rather than surplus, none of this is your priority — free, independent help from MoneyHelper, StepChange or National Debtline comes first, and our money worries page lists them.
What is still uncertain
Two things. First, NS&I can withdraw or reprice these Issues without notice, as it has repeatedly — it manages a net financing target set by the Treasury, so it raises rates when it needs money in and cuts them when it does not. These rates are not a standing offer.
Second, the direction of Bank Rate. The Monetary Policy Committee held at 3.75% on 30 July 2026, and the inverted savings ladder shows markets pricing cuts ahead. The next scheduled MPC announcement is the one to watch: if rates start falling, today's fixes will look better in hindsight, and the case for fixing something strengthens. That is exactly why the term decision matters more than the last 0.03 of a percentage point.
Where coaching ends and advice begins
Everything above is coaching: understanding the wrapper, the allowance, the access, and the order to do things in. Buzz Money Coach provides money coaching, not regulated financial advice, and nothing here is a recommendation of a specific product or provider. If your question is about investing rather than saving, or about how a large cash holding fits a wider financial plan, that is regulated territory — coach or adviser? draws the line, and where you need an adviser we can introduce you to one.