NS&I has relaunched its popular inflation- busting savings certificates, which will be linked to the retail prices index (RPI).
Index-linked Savings Certificates will pay index-linked, measured by the RPI, plus a fixed rate of interest of 0.50% AER. It is also issuing Fixed Interest Savings Certificates which will pay 2.25% AER.
The certificates are tax-free, with a minimum investment of £100 and maximum investment of £15,000 per Issue.
Jane Platt, chief executive at NS&I, said: "Our aim is to keep savings certificates on sale for a sustained period of time and to enable as many savers as possible who wish to invest to do so.
"With this in mind we will be offering a five-year term, only available direct from NS&I. We understand fully that we will see very high demand for index-linked savings certificates."
The index-linked savings certificates had been withdrawn from general sale in July 2010 after "exceptional demand" saw NS&I exceed its net financing range for 2010-11, although their reintroduction was announced at the time of the Budget earlier this year.
Danny Cox, head of advice at Hargreaves Lansdown, said: "Index-linked certificates are one of the best ways to protect savers cash from inflation and they are tax-free.
"I was surprised but very pleased they remain linked to RPI: I was expecting a change to a CPI link which would have generally resulted in lower rates of return."
However, Informed Choice managing director Martin Bamford has urged savers to consider inflationary trends before investing in the certificates.
He said: "The latest Bank of England inflation report is forecasting a peak in price inflation later this year before it starts falling back.
"Savers who commit their money to these new index-linked bonds could be very disappointed with the total return over a five year period.
"Early withdrawals from NS&I index-linked bonds are possible, but without the addition of index-linking or interest if they are surrendered during the first year."
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