NS&I Savings Calculator

Calculate savings interest with different compounding frequencies. See AER vs nominal rate.

Last updated: April 2026 · Source: NS&I

£

Final Balance

£11,442.48

Interest Earned

£1,442.48

AER

4.59%

Disclaimer

This calculator is provided for informational purposes only and should not be considered as financial or tax advice. All calculations are performed locally in your browser — no personal data is collected or sent to our servers. Rates and thresholds are sourced from HMRC and GOV.UK and are updated for the current tax year. Always verify results with HMRC or consult a qualified professional before making financial decisions.

How It Works

NS&I (National Savings and Investments) products are backed by HM Treasury, making them among the safest savings vehicles in the UK with 100% government guarantee (compared to the £85,000 FSCS limit on bank deposits). Products include Income Bonds, Direct Saver, Green Savings Bonds, and Premium Bonds, each with different interest rates, access terms, and minimum deposits.

Interest calculation varies by product. Income Bonds pay interest monthly on the full balance at a variable rate. Direct Saver pays variable interest on balances from £1 upward. Green Savings Bonds offer a fixed rate over a 3-year term with interest paid at maturity or annually depending on the issue. The calculator applies the correct compounding method for each product: monthly compounding for Income Bonds, annual for fixed-term products.

The comparison with high-street banks uses AER (Annual Equivalent Rate) for a like-for-like assessment. NS&I rates are often slightly below the best high-street rates because of the superior government backing. However, NS&I interest is paid gross (no tax deducted at source), and for Premium Bonds, all prizes are entirely tax-free. The calculator factors in your personal savings allowance (£1,000 basic rate, £500 higher rate) to show after-tax comparisons.

NS&I Income Bonds vs high-street easy-access for £50,000

  1. NS&I Income Bonds rate: 3.93% AER (variable)
  2. Annual interest on £50,000: £1,965 paid monthly (£163.75/month)
  3. High-street best buy easy-access: 4.50% AER = £2,250/year
  4. Higher-rate taxpayer PSA: £500. Tax on NS&I excess: (£1,965 - £500) x 40% = £586. Net: £1,379
  5. Tax on bank excess: (£2,250 - £500) x 40% = £700. Net: £1,550. Bank wins by £171/year after tax, but NS&I has unlimited government guarantee

Source: NS&I

Frequently Asked Questions

What does the NS&I Savings Calculator do?
Calculate savings interest with different compounding frequencies. See AER vs nominal rate. All calculations are performed in your browser using official UK rates and thresholds.
Is this calculator suitable for financial decisions?
This calculator provides estimates for guidance only. Investment returns are not guaranteed and your capital is at risk. Consider seeking independent financial advice before making investment decisions.
Are ISA contributions tax-free?
Yes. The annual ISA allowance for 2025/26 is £20,000. Any interest, dividends or capital gains within an ISA are completely tax-free.