What is National Savings and Investments (NS&I)?

Full Definition

National Savings and Investments (NS&I) is a state-owned savings organisation, operating as an executive agency of HM Treasury, that raises money for the government by offering savings and investment products directly to the public. Because deposits with NS&I are backed by the full faith and credit of HM Treasury rather than by a private bank or building society, NS&I products carry no realistic risk of the provider becoming insolvent, and unlike ordinary bank and building society deposits (which are protected only up to £85,000 per person per institution under the Financial Services Compensation Scheme), 100% of money held with NS&I is protected however large the balance. NS&I's best-known product is Premium Bonds, where instead of paying interest, each £1 bond unit is entered into a monthly prize draw with tax-free cash prizes ranging from £25 up to £1 million, funded by an overall "prize fund rate" that NS&I sets periodically. NS&I also offers Direct Saver and Income Bonds (variable-rate easy access accounts), fixed-rate Guaranteed Growth and Guaranteed Income Bonds, and Green Savings Bonds, whose proceeds are earmarked for government green spending projects. Because NS&I periodically adjusts its rates to manage how much money it needs to raise for the Treasury relative to other funding sources such as gilts, its savings rates are not always the most competitive on the market, and savers are generally advised to compare NS&I rates against best-buy tables from banks and building societies rather than assuming government backing alone makes it the best choice.

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