Grandparent with baby thinking about NS&I Green Savings BondBy Barnes Gladman, Financial Designer with Anstee & Co.

Could NS&I Green Savings Bond be right for you? Well, National Savings and Investments (NS&I) has long been considered a safe haven for investors, with 100% of savings secured, compared to the £85,000 limit provided by most banks and investment houses.

In a time of uncertainty, brought on by the COIVD-19 pandemic, National Savings & Investments products have provided a safety net for savers, with over 25 million people holding some form of NS&I investment.

Alongside the pandemic, increased awareness of climate emergencies and social injustices, has seen a huge increase in demand for socially responsible investments, implementing Environmental, Social and Governance factors.

Until very recently, NS&I did not offer anything for investors conscious about having a positive impact on their capital, rather than purely returns. However, in the Spring 2021 Budget, the Chancellor announced the NS&I Green Savings Bond, which was launched on the 22nd of October 2021.

What is the NS&I Green Savings Bond – Issue 2?

  • A 3 year, 1.30% AER fixed rate bond (amount invested is locked away until maturity).
  • Minimum investment – £100.
  • Maximum investment – £100,000 per person.
  • Aged 16+ can access.

The funds raised by the bond will be invested in green projects including offshore wind farms, transition to electric vehicles, and revamps to housing and public transport.

This is all part of the government’s long-term goal of reaching net-zero carbon emissions by 2050.

The government will publish details of all green projects the bond will finance, along with the environmental benefits of each. Details can be found at;

https://www.gov.uk/government/publications/uk-government-green-financing

Application for the Green Savings Bond is completely online, as part of a commitment to reduce paper waste.

NS&I Green Savings Bond Rate

The NS&I Green Savings Bond rate of 1.30% per annum is not the most competitive on the market when compared to normal (non-green) savings options.

The top 3-year fixed accounts pay nearly three times what the Green Savings Bond offers. Therefore, it is not an account for investors looking to maximise interest returns. However, in comparison to other green offerings, the Green Savings Bond is a lot more competitive, as shown in this table produced by Money Saving Expert;

‘Green’ savings accounts (including NS&I for comparison)

Provider ‘Green’ savings products offered How does it contribute to environmental causes? Ethical Consumer rating (1)
NS&I Green Savings Bond Issue 2

 

A three-year fixed bond paying 1.30% (min £100) The funds it raises will be used by the Government to help environmentally-focused projects get off the ground, for example building offshore wind farms or revamping homes and public transport. Not applicable (2)
Triodos – Easy-access at 0.15% (min £1)

– Easy-access ISA at 0.2% (min £10)

– One-year bond at 0.4% (min £500)

Invests in a range of companies that have a positive impact on the environment to ‘support a sustainable future 16/20
Ecology BS – Easy-access at 0.1% (min £25)

– Easy-access ISA at 0.3% (min £25)

– 90-day notice at up to 0.55% (min £500)

– Regular Saver paying 0.8% (min £25)

Provides lending to support sustainable projects and properties, with £43.5m lent for these purposes in 2019. 15.5/20
Tandem Easy access saver paying 0.65% (no min) Through green lending initiatives, helping to make UK homes more sustainable Not yet rated
Oxbury Bank One-year fixed rate bond paying 0% (min £1,000) Uses savings interest of 0.7% to fund the planting of Woodland Carbon Code compliant trees Not yet rated
  • Rating taken from Ethical Consumer scoring table, with ‘Environment’ selected as the most important factor. (2) NS&I will give funds to the projects the Government chooses to back, rather than choosing what to invest in, so an ethical rating isn’t relevant here.

(Money Saving Expert, March 2022)

If green is a priority, the NS&I does come out favourably among competitors, coupled with the 100% savings backed, opposed to the £85k maximum, for larger investors.

In Conclusion

PFS logoThe government and the NS&I have taken large steps towards providing a greener, more socially responsible offering for low-risk investors/investments.

However, it does appear to create a trade-off between going green, and higher returns. Whereas this is perhaps not the case with regards to higher risk investment portfolios, which in recent times has seen Environmental, Social and Governance (ESG) funds outperforming more traditional offerings in some areas.

Is ESG investing right for you? If you want to reach your financial goals, whilst also considering the environment and sustainability, then socially responsible investments may be the perfect fit for achieving your objectives.

How Anstee & Co can help you with your investments.

Is ESG investing right for you? If you want to reach your financial goals, whilst also considering your impact on society and sustainability, then socially responsible investments may be the perfect fit for achieving your objectives.

If you would like to find out more about investments in line with your ethical view, then why not contact Barnes to find out more. The initial meeting is at our expense and is without obligation. As Independent Financial Advisers (IFA’s), the financial advice we offer is truly unbiased. Our experience covers all aspects of financial planning, including pensions, estate planning, mortgages, and investments.

call back logo for help with NS&I Green Savings Bond Our offices are located at-

  • Kettering, Northamptonshire
  • Stamford, Lincolnshire
  • Market Harborough, Leicestershire
  • Towcester, Northamptonshire
  • London, Greater London

Additionally, we made use of meeting rooms in-

  • Northampton
  • Bedford
  • Lutterworth
  • Wellingborough

Also, we make full use of video conferencing facilities such as-

  • Zoom
  • Microsoft Teams
  • Skype
  • Facetime

We can also arrange a conference telephone call. There is no need to visit an office as all work can be handled remotely.

So, if you have any thoughts or comments on this article, “NS&I Green Savings Bond. Find out more.”, then we would love to hear your thoughts.

Financial Conduct AuthorityFinally, the information contained in this article is for information purposes only and does not constitute advice. No action should be taken based on this information alone. Anstee & Co. is authorised and regulated by the Financial Conduct Authority (FCA).