NS&I Savings Calculator

NS&I stands for National Savings and Investments, and its accounts are backed by HM Treasury rather than by the deposit protection scheme that covers the banks. The whole balance is guaranteed however large, where an ordinary bank deposit is covered only to £120,000 under FSCS (since 1 December 2025). Around 25 million UK savers hold something with NS&I and the organisation looks after more than £200 billion. At NS&I rates on 27 September 2026, the range covers Premium Bonds at a 4.35% prize rate, Direct Saver at 3.75% for easy access, a Direct ISA at 3.80% and a Junior ISA at 3.70%, Income Bonds at 3.69% gross (3.75% AER) paying monthly interest, Green Savings Bonds at 4.45% fixed for 3 years, and British Savings Bonds (Guaranteed Growth and Income Bonds) fixed for 1 to 5 years at 4.81% to 4.85% AER.

Interest is worked out differently depending on the product, which is why comparing headline rates alone can mislead. Income Bonds pay a variable rate and send the interest to your bank account each month, so it never compounds. Direct Saver pays a variable rate on anything from £1 upwards and adds interest once a year on 1 April. Green Savings Bonds and Guaranteed Growth Bonds fix the rate and add interest on each anniversary of the investment. Pick the paid-out option for Income Bonds and annual compounding for the others, so the figures follow how each account actually pays rather than a single generic formula.

Comparing NS&I with the high street works best on AER. NS&I rates usually sit a little behind the best buys, which is the price of the Treasury guarantee. Direct Saver at 3.75% AER stands against easy-access best buys of about 4.55% (Moneyfacts, 24 September 2026, most including a 12-month bonus), a gap that typically runs from 0.5% to 1.0%. For most savers the better-paying banks make more sense up to the £120,000 FSCS limit at each institution. Above that, splitting money across banks becomes a chore, and the unlimited cover starts to earn its keep.

Premium Bonds are the odd one out and the reason many people hold anything with NS&I at all. Every £1 buys one bond and one entry into the monthly prize draw, up to a maximum holding of £50,000. Prizes run from £25 to £1 million, and the September 2026 draw paid 2 prizes of £1 million, 95 of £100,000, 192 of £50,000 and 381 of £25,000 among about 6.5 million prizes. The 4.35% prize rate, from the September 2026 draw, is an average rather than a promise, so most holders do worse than the headline. At odds of 21,000 to 1 per bond, a £50k holding averages about 2.4 wins a month, while smaller holdings are far more erratic. Money can be cashed in at any time and arrives within 1 to 3 working days.

Tax treatment splits the range neatly in two. Premium Bond prizes are entirely tax-free, and the NS&I Direct ISA and Junior ISA are sheltered by the ISA wrapper. Everything else, including Direct Saver, Income Bonds and British Savings Bonds, pays interest gross with nothing deducted at source, so it counts against your Personal Savings Allowance of £1,000 at the basic rate or £500 at the higher rate and is taxable above that. Savings tax rates rise by 2 points to 22%, 42% and 47% from 6 April 2027. The after-tax comparison is the one worth making, and the calculator shows it for your tax band.

Deciding whether NS&I suits you comes down to what you are optimising for. It works well for people with large balances who value Treasury backing, for higher and additional rate taxpayers who can take their return tax-free through Premium Bonds, and for anyone who would rather not monitor best-buy tables every few months. It is a poor choice for maximising returns, typically running 10% to 25% behind the best rates on the market, and it no longer offers inflation protection, since Index-Linked Savings Certificates have been closed to new investors since 2011 and only existing holders can renew.