NS&I, the government’s savings organisation, has withdrawn its popular Guaranteed Growth and Guaranteed Income Bonds from sale.
The three- and five-year fixed savings accounts had offered attractive interest rates of up to 4.6%, but were removed from sale on 11 December.
The one- and two-year versions of these accounts, which had also proved very popular, were withdrawn by NS&I in November.
Popular fixed rate savings
NS&I is a favourite destination for savings among cautious consumers, not least because all deposits placed with the organisation are 100% guaranteed by HM Treasury.
However, the returns on offer from NS&I savings products have also been impressive recently – sparking criticism from some building societies, which claimed that NS&I’s government backing gave it an unfair advantage in a competitive savings market.
In November, financial data firm Moneyfacts showed that 34% of all savings searches were for fixed-rate deals, while research suggested the average ‘shelf life’ of a fixed-rate bond was just 23 days.
Top savings rates withdrawn
New statistics from Moneyfacts confirm that the market’s leading fixed-rate savings accounts are often ‘sold out’ within days of their launch. According to its data, 62% of the changes made to its savings tables in November were product withdrawals.
While many of the products pulled from sale were replaced, Moneyfacts says that in the majority of cases the replacement products offered lower returns than those withdrawn from the market.
Michelle Slade, spokesperson for Moneyfacts.co.uk, says: ‘Despite no change in bank rate since March, savers have seen rates steadily increasing, particularly on fixed-rate bonds. However, in the last few weeks the tide has turned and many top deals are being withdrawn.
‘The decreasing availability of top rates means that when a market leading deal is launched, it is soon over-subscribed. The recent launch of the top paying one year bond from Melton Mowbray BS lasted just one day.’
Find a better savings rate
If you’re on the hunt for a new savings account, making sure you apply for a top deal sooner rather than later is vital. The Which? fixed rate savings account review lists the deals that our independent researchers rate the most highly.
If you’re after a variable rate account, take a look at the Which? savings account review.
And don’t forget that it’s crucial to be aware of how your savings would be protected in the event of a crisis. Check out our recently updated for information on how your deposits are covered by the Financial Services Compensation Scheme.
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