The Government-backed bank is raising savings rates attached to British Savings Bonds

National Savings and Investments (NS&I) has announced a major overhaul to its line of savings products ahead of next week's Premium Bonds.

While primarily known for its signature Premium Bonds, which allow savers to win cash prizes in a monthly lottery, the Government-backed bank also provides other money-saving vehicles.

The financial institution has raised interest rates on its fixed-term British Savings Bonds, covering terms of one, two, three and five years.

This comes days after the Bank of England Monetary Policy Committee's (MPC) decision to keep the base rate at 3.75 per cent amid inflationary concerns.

The increases apply to both its Guaranteed Growth Bonds and Guaranteed Income Bonds products. Customers opening new accounts as well as those with maturing investments can access the improved rates.

These rate rises are a response to shifting conditions across the broader savings market, with other banks and building societies following suit.

NS&I said the changes would support its efforts to hit its Net Financing target, while maintaining a balance between the needs of savers, taxpayers and the wider financial services industry.

Andrew Westhead, NS&I's Retail Director, said: "Today's increases mean savers can now choose from improved fixed-term rates across our one, two, three and five-year British Savings Bonds, with the certainty of knowing exactly what return they will receive over their chosen term."

He added: "Alongside that certainty, customers continue to benefit from the reassurance that all money invested with NS&I is 100 per cent secure and backed by HM Treasury."

The emphasis on Treasury backing distinguishes NS&I from other savings providers, as deposits held with the government-owned institution carry full protection rather than being subject to the Financial Services Compensation Scheme limit.

British Savings Bonds are accessible to savers looking for guaranteed interest rates for fixed terms of either one, two, three or five years.

It should be noted that funds cannot be withdrawn early from fixed-term products, while savers need a minimum investment of £500 and a maximum of £1million per person in each issue.

Here is a full list of the changes to British Savings Bonds from NS&I: