# NS&I savings products explained

> Savings & ISAs · Last updated 4 July 2026

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## Quick answer

National Savings & Investments offers Premium Bonds, Direct Saver and fixed-term products backed by HM Treasury — Premium Bond prizes are tax-free but not guaranteed.

NS&I is a government-backed provider popular for security and prize draws. Rates change with market conditions and government funding needs. This guide compares main products for UK savers.

## Key facts

- Premium Bonds pay tax-free prizes instead of interest — odds of winning per bond are published monthly
- Direct Saver and Income Bonds offer variable rates backed by HM Treasury
- Maximum Premium Bonds holding is £50,000 per person
- NS&I products count toward personal savings allowance only when they pay interest, not prizes

## Premium Bonds

Each £1 bond enters monthly draws for prizes from £25 to £1 million. Average prize rate is stated but not guaranteed — you may win nothing.

Popular for tax-free returns on large cash balances, though expected returns may lag best buy savings accounts in low-prize periods.

## Interest-paying NS&I

Direct Saver accepts deposits from £1 with easy access. Green Savings Bonds have fixed terms supporting environmental projects with set rates at launch.

Income Bonds pay monthly interest to retirees needing regular income — rates track government decisions.

## Safety and limits

All NS&I money is 100% backed by HM Treasury — no FSCS limit applies because it is government debt. This makes NS&I popular for holding large cash balances above the £85,000 FSCS limit.

Online and phone management is standard — NS&I does not have branches. You manage Premium Bonds, savings accounts and bonds through the NS&I website or by phone.

## Frequently asked questions

### Are Premium Bonds worth it?

Depends on prize luck and tax position. Higher-rate taxpayers may value tax-free prizes more than basic-rate savers.

### Can children hold Premium Bonds?

Yes — adults can buy bonds for under-16s held in trust until they turn 16.

### How do I cash in?

Premium Bonds can be cashed online anytime with no penalty — funds arrive in a few days.

## Primary source

https://www.gov.uk/government/organisations/ns-i

## Related

- [Premium Bonds explained](https://moneyguide.org.uk/savings/premium-bonds-explained/)
- [Best savings rates explained](https://moneyguide.org.uk/savings/best-savings-rates-explained/)

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Independent UK money guidance from [Money Guide](https://moneyguide.org.uk). Information only — not regulated financial advice.