Quezi

You receive no interest on your savings held in a piggy bank (photo by Clare Bell CC-BY)

The National Savings and Investments, also known as NS&I, is one of the largest savings banks in the United Kingdom, accounting for 10% of the UK retail savings investments market. It has 27 million customers and manages over £66 billion in investments. Unlike other banks which are ultimately owned by shareholders, the NS&I is an agency of the UK Government’s Treasury Department.

The NS&I’s main roles are to raise money for the government by borrowing from the public, and in doing so, reduce the cost of government’s borrowing from other sources. The benefit for its savers is that their investment is 100% backed by the government.

The NS&I started life as the Post Office Savings Bank in 1861 and was designed to encourage the ordinary working men and women to start regular savings. In the 1960s the bank was separated from the Post Office and in 2002 was renamed as National Savings and Investments.

The bank offers a number of financial products, but its most famous savings vehicle is Premium Bonds. Instead of paying interest on investments, the interest is pooled and entered into a prize draw which is held monthly. The top prize is £1 million pounds.

Their remaining financial products are more traditional with savings accounts; Individual Savings Accounts (ISAs); Index-linked Savings Certificates – these are designed to keep pace with inflation by being linked to the Retail Prices Index; and Income and Equity Bonds. Some of the investments are tax-free which make them very attractive for some types of investors and savers.

The bank may not give the higher interest rates offered by many other high street banks, but many argue that their guaranteed growth bonds are sometimes very competitive, and its savers benefit from the security of their capital.

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