You are here: Home - Saving-Banking - News -

NS&I rate cuts take effect from today

Written by: Emma Lunn
National Savings & Investments has slashed the interest rates it pays on a raft of savings accounts, with some accounts now paying just 0.01%.

The rate cuts were announced in September and come into force from today.

NS&I’s Direct Saver, a previous best buy, now pays just 0.15%, down from 1% AER. NS&I’s Investment Account pays 0.01% from today, a reduction from 0.8%. Income Bonds also pay 0.01%, down from 1.16%.

NS&I’s Junior ISA now has an interest rate of 1.5%, down from 3.25% AER.

In addition, the odds of any £1 Premium Bonds number winning any prize will tumble from 24,500 to one, to 34,500 to one from the December draw.

Kevin Brown, savings specialist at Scottish Friendly, said: “Today is the day that many savers will have been dreading, as NS&I slashes the rates on its premium bonds and range of saving products.

“Up until now, the Treasury-backed bank has offered some solace to savers as it’s maintained rates while many banks and building societies pulled back from the market following the Bank of England’s decision to reduce interest rates to 0.1%. NS&I experienced five consecutive months of record purchases of Premium Bonds and savers poured money into accounts as its rates edged towards the top of the best buy tables.

“But with options for savers now limited, it could be a good time for people to review their finances and make decisions on how they can potentially make their money work harder. This might involve shopping around for market-leading rates or choosing to prioritise paying off debts, as interest rates on credit repayments are likely to exceed interest earned on cash savings.”

Adrian Lowcock, head of personal investing at investment platform Willis Owen, said: “NS&I rate cuts come into force today and this is another stark reminder to savers on the importance of proactivity to benefit from the best possible returns. Using a savings platform is an easy option for people looking to compare rates across different providers.

“Savers flocked to NS&I during the height of the pandemic and demand was pushed to breaking point, so it was a case of when rates would drop, not if. Think ahead of the game and take control of your savings and investments to make your money work harder for you.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

How to help others and donate to food banks this winter

This winter is expected to be the most challenging yet for the food bank network as soaring costs push more pe...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week