The much anticipated new Green Savings Bonds from National Savings & Investments (NS&I) are now available but with a nominal interest rate on offer to savers.
The NS&I Green Savings Bonds offer just 0.65% gross/AER fixed rate over a three-year term.
Interest is earned daily and added once a year on the investment’s anniversary and paid on maturity.
Initially announced by Chancellor Rishi Sunak in his Spring Budget, the new Green Savings Bonds will be on sale from NS&I until at least 22nd January 2022.
The Green Savings Bonds are available to purchase and manage online at nsandi.com.
The bonds have a minimum investment of £100 and a maximum of £100,000 per person, with investors aged 16 or over to purchase them. Savers can buy the bonds individually or jointly.
The total amount deposited has to be held for three years, and no withdrawals are permitted during this time. However, there is a cooling-off period in the first 30 days of investment.
The government will use the money saved in the new Green Savings Bonds to help finance their green spending projects to tackle climate change and make the UK more sustainable.
Likely projects include:
Preventing pollution, energy efficiency.
Protecting natural resources.
Adapting the country to a changing climate.
Chancellor Rishi Sunak said:
“Our world-first Green Savings Bonds give savers across the UK the chance to back the government’s green projects and put their money to work in the fight against climate change.
“The UK is already a world leader in green finance and these innovative new savings bonds will deliver both financial returns and environmental benefits, in a transparent and secure way.”
Ian Ackerley, NS&I Chief Executive, said:
“We are proud to be offering Green Savings Bonds on behalf of the government. Green Savings Bonds will offer savers the chance to contribute towards the UK’s green agenda and support six key areas to help make our environment greener, cleaner and more sustainable. As well as helping the environment, savers will see a fixed return on their investment and will also benefit from NS&I’s 100% security on all capital invested.
“Green Savings Bonds will be on sale for at least three months, giving savers ample opportunity to invest and the Bonds will be available to purchase and manage online.”
While many savers and investors will undoubtedly welcome opportunities to support green projects, the interest rate on offer is far less competitive than available elsewhere for an equivalent fixed-term savings account.
Laura Suter, Head of Personal Finance at AJ Bell, said:
“All that hype for such a paltry rate, is definitely what some savers will be thinking after the announcement of the interest rate on the government’s green savings bonds. But, in the words of Kermit the Frog, it’s not easy being green, and savers are discovering that there are payoffs to putting your money to good use. But having had to wait since March for the full details of the new bond, now they’re here it’s likely to go down like a lead balloon.”