The new NS&I Investment Guaranteed Growth savings bond will only be available online when it launches next month. The announcement is a blow to the millions of savers who will potentially will be excluded from the ‘market-leading’ savings rate.

The three-year bond was first announced by Chancellor Philip Hammond in last year's Autumn Statement as a boost for savers. It will offer a rate of 2.2% on deposits between £100 and £3,000, and is expected to be hugely popular when it launches next month.

However, the fact that it's an online-only account – the first such product from NS&I – will come as a blow to the 5.3 million adults who have never used the internet.

It will particularly affect elderly and disabled people, who make up the majority of this group.

Baroness Ros Altmann, the former pension minister, was critical of the move. She told the Daily Mail: "I'm disappointed. Many older people live alone, with no computer access."

Why is it online only?

NS&I products can usually be applied for by post or phone as well as online, so the change is an intereresting one.

There's no question that more people are applying for savings accounts online, so the move does reflect changing customer habits.

What's more, online accounts are cheaper to manage as they don't require anyone to answer phone calls or open letters, making it more attractive to NS&I.

Whatever the reason, it means you're going to have to apply online if you want one.

But is it even worth going for in the first place? Read on to see our analysis of the bond.

How it compares

The NS&I product can be already be matched by challenger bank Atom Bank.

It's offering a three-year fixed rate bond paying 2.2% on balances from £50 up to a maximum of £100,000.

But while you can save more with Atom Bank, it does offer less flexibility.

Unlike typical fixed-rate bonds the NS&I Investment Bond allows early withdrawals, subject to a penalty of 90 days’ interest.

If you have £3,000 invested that means you’d pay £16 to access your cash.

If you think rates are likely to rise and are wary of locking up your money for a long time the NS&I Investment Bond is a better option as Atom Bank doesn’t allow you to access your cash before the three-year term is over.

[Read more: Is the new NS&I savings bond worth it?]

How it can be beaten

If you are chasing the best rate for your savings then the new NS&I Investment Bond can be beaten by four other deals right now, which are set out in the table below.



Interest rate

Minimum deposit

Nationwide FlexDirect

Current account

5% (one-year only)

£1 (max: £2,500)

TSB Classic Plus

Current account


£1 (max: £1,500)

Bank of Scotland Classic Account with Vantage

Current account


£3,000 (max: £5,000)

Atom Bank Five-Year Fixed Saver

Five-year fixed-rate bond



Atom Bank Three-Year Fixed Saver

Three-year fixed-rate bond



*Rate will change to 2% on balances up to £5,000 from 11 June 2017

Nationwide's FlexDirect account pays 5% on balances of up to £2,500, fixed for a year. The only condition is you need to pay in at least £1,000 a month.

Bank of Scotland's Classic Account with Vantage pays 3% on balances of between £3,000 and £5,000 so long as you pay in £1,000 a month and have two direct debits set up.

However, this rate will be cut to 2% on balances up to £5,000 from 11 June 2017.

The TSB Classic Plus account pays 3% variable on balances of up to £1,500, providing you credit the account with £500 a month.

If you are after a fixed rate and don’t mind locking up your cash, the Atom Bank five-year fixed-rate bond offers a fixed 2.4% return on deposits from £50 up to £100,000.

If you are willing to take risk with your money you could also get better returns from peer-to-peer savings.

For larger balances, there’s also the Santander 123 Current Account, which pays 1.5% on balances up £20,000. Note that the bank charges a £5 monthly fee on this particular account.

Why it’s important to chase the top rate

It’s important to target the best rate you can for your savings to help protect them from inflation.

The latest Consumer Prices Index (CPI) measure of inflation is currently 1.8% but it’s predicted to soar over the next year.