The NS&I's (National Savings & Investments) one and three year guaranteed growth and guaranteed income bond accounts are popular vehicles for savers but the latest move could make them less attractive. 

The up to £1 million government-backed guarantee with 100% capital protection was an attractive option for savers, but this has been reduced to just £10,000. 

It's possible to find similar benefits elsewhere however, with features such as higher rates available from other providers. 

The reason for the change according to NS&I is that the government sets a target in terms of financing for the organisation  for the 2018/19 financial year.

 The rate that the product pays or the level of protection therefore needed to be changed and NS&I chose the latter. 

Giles Hutson of Insignis Cash Solutions comments that:

"When NS&I reaches its annual funding targets, wham – the shutters come down, and they either come down in terms of interest rates or on the amount you can save."

It's possible to still protect your money by spreading the cash over a number of smaller accounts, taking advantage of the protection limits of each.

You can protect up to £85,000 of your savings through the Financial Services Compensation Scheme (FSCS), with couples allowed up to £170,000. 

If a couple has £1 million that they wish to protect, would need to divide this money across six accounts, which while unwieldy, would ensure that they were protected under the FSCS and most likely allow them to access higher rates than those offered by the FSCS.

Individuals that are unable to take advantage of the couples allowance would need to divide the same amount over 12 accounts. 

This would most likely result in a better overall rate than the NS&I's three year product for example at 1.95%, which is bested by RCI Bank's equivalent product at 2.31%. 

Fixed term products can form part of your long term financial planning, it's important to speak to your adviser who can help you to achieve your goals.  

The value of investments and income from them may go down as well as up and you may not get back the original amount invested.

 Information is based on our current understanding of taxation legislation and regulations which is subject to change.