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NS&I cuts interest rate but protects Premium Bonds
National Savings and Investments is slashing interest rates on its savings products by up to 1.85 per cent this week but returns on Premium Bonds will not be cut.
The Treasury-backed group said it was reducing the returns paid on its variable rate and fixed interest savings products following recent interest rate cuts and falls in gilt yields.
But it has decided to hold its Premium Bond prize fund at its current level for at least the February and March draws.
It is also creating a new 25 prize category, which could be introduced after the beginning of April, to reflect the fact that Premium Bond holders value frequent wins.
The prize fund currently pays average returns of 1.8 per cent to people who have the maximum 30,000 invested, with the value of individual prices ranging from 50 to 1m.
The group is reducing the rates paid on its variable rate savings products, such as its easy access savings accounts and its ISAs, by up to 1 per cent, while returns on income bonds are being reduced by 0.5 per cent.
It is the first reduction made on the products since interest rates were cut in November, and since then the Bank of England base rate has fallen by 1.5 per cent.
Interest paid on new fixed rate savings products, such as fixed interest savings certificates, is being cut by up to 1.85 per cent due to falls in gilt yields since returns on the products were last changed in September last year.
Peter Cornish, director of customer offer at NS0&I, said: "We always set our interest rates in a fair and measured way.
"Since the changes to the base rate last December we have taken the time to understand the full impact of any potential changes on our customers."
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Weather for Yorkshire
Saturday 11 February 2012
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