National Savings & Investments is now sitting at the top of best buy tables for savings accounts, as other providers have slashed their rates.
According to data from Moneyfacts and SavingsChampion, NS&I's pledge made earlier this year not to press ahead with its originally planned cuts to interest rates has meant it is now an outlier in the tables.
Anna Bowes, co-founder of Savings Champion, said NS&I's Income Bonds account is now sitting in the top spot paying 1.15 per cent monthly gross, after providers such as Marcus cut their rates in response to the Bank of England's gloomy inflation forecast in April and suggestions it could put the bank base rate into negative territory.
Savers can put £1m into the Income Bonds, which are protected by HM Treasury beyond the current Financial Services Compensation Scheme of £85,000.
NS&I has previously pledged to help savers at this difficult time by abandoning plans to lower the rates on some of its savings products.
Its Direct Saver account also stands at 1 per cent AER, with investors able to deposit up to £2m into the account, with all funds protected by HM Treasury.
Currently, many high street banks have slashed savings account rates to 0.01 per cent.
This has led many advocates of cash to call NS&I a "war bond" provider in the battle against Covid-19.
Philip Milton, principal of PJ Milton in Devon, said: "We have some clients with money there – especially Premium Bonds which have a constraint on the amounts you can subscribe.
"However, there are accounts with tasty limits (up to £4m in aggregate) and a prospective client last month, who had just sold his farm (fortunate timing) has deposited £2m there because that way he doesn’t have to worry about FSCS limits and bank insolvencies. This is a sobering thought."
Currently, NS&I is keeping the Premium Bond prize fund rate at 1.40 per cent, instead of the planned reduction of 10 basis points to 1.30 per cent.
Mr Milton added: "We have always said that PSBs aren’t investments at all really, but for higher-rate taxpayers, who have exhausted every other regular financial planning avenue and enough in assets to use capital gains tax exemptions regularly, then having their limits in them is not harmful as at least the meagre prizes are tax-free.
"For other [investors], as long as they don’t become superstitious about them, then keeping their secondary emergency funds in them but encashing as much as they need from time to time, is not a problem either."