NS&I said average fixed rates had risen in the wider savings market since the launch of its green bond last October and it wanted to offer a “new competitive rate” to savers. But experts suggested the Government-backed bank had to resort to drastic measures after its initial rate of 0.65pc had been poorly-received at a time of soaring inflation. 

Sarah Coles, of Hargreaves Lansdown, a stockbroker, said doubling the green bond rate was a “dramatic step” after the “real disappointment” of the old return.

“These bonds are specifically designed to raise funds for particular projects, so falling short of the fundraising target would have put a spanner in the works. They had to do something pretty dramatic to turn these bonds around.

“Doubling the rate still leaves the bonds a long way short of the best on the market, but is likely to win over a good chunk of savers who want to do the right thing with their money, in an account completely protected by the Treasury, and with a brand they know and trust.”

Savers must be aged 16 and over, invest a minimum of £100, up to a maximum of £100,000 per person, and money cannot be withdrawn before the end of the three-year term. 

Becky O’Connor, of broker Interactive Investor, said: “Savings rates are still clearly way below inflation and so losing money in real terms, but for those still keen to store some money in cash and do so in a green way, this rate is now at least competitive.”