Finally it’s ‘green means go’ for NS&I green bonds
15th February 2022 09:57
by Rebecca O'Connor from interactive investor
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A new issue of green bonds by NS&I, the government-backed savings institution, offers a rate of 1.3% over a three-year term.
If you are covering the launch of a new issue of green bonds by NS&I, the government-backed savings institution, offering a rate of 1.3% over a three-year term, Becky O’Connor, Head of Pensions and Savings, interactive investor, said: “Finally, green means go for savers.
“The rate on this issue is double the original green bond launch in October last year. NS&I says this is down to the rise in average rates on fixed-term products, but it may also be down to the original rate not looking appealing enough to attract the masses.
“While this rate is not top of the best-buys for three-year bonds, which are currently around 1.8% according to Moneyfacts, it is far more compelling for those wanting their money – up to £100,000 - to be put to productive use in the UK’s growing low-carbon economy, at no risk.
“Many people are interested in backing their sustainable values with their money and it now appears they can do so without too much financial sacrifice. Savings rates are still clearly way below inflation and so losing money in real terms, but for those still keen to store some money in cash and do so in a green way, this rate is now at least competitive.
“If you want to put your money to work in the green economy for longer and don’t mind taking some risk, there are now hundreds of sustainability-focused investment funds, trusts and ETFs available through stocks and shares ISAs and personal pensions.”
Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “An interest rate of 1.3% for a savings account that keeps your cash locked up for three years isn’t anything to shout about, but cause-based savings products are few and far between, and more options in this area is welcome.
“It’s important that savers and investors keen to go green understand that they don’t necessarily have to sacrifice returns to make a positive impact on the environment.”
“For those willing to lock up their money over five-plus years, ethical funds could be a good alternative, carrying greater risk but offering a more attractive coupon and the potential for growth on your initial investment.”
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