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

NS&I ups rate on Direct ISA but ‘still playing catch up’

Written by:
National Savings & Investments (NS&I) has increased the rate of interest paid on its Direct ISA.

The Government-backed bank has hiked the rate paid on the account from 2.15% AER to 2.40% AER.

More than 333,000 ISA holders will benefit from the interest rate increase, the second time in 2023 in which the rate paid on the Direct ISA has been increased.

The move follows previous increases to the returns on offer from other savings accounts offered by NS&I. For example, from March, the prize rate on Premium Bonds was increased to 3.3%, the fifth hike to take place in a year.

‘Playing catch up’

Sarah Coles, head of personal finance at Hargreaves Lansdown, said that the Direct ISA was “playing catch up” as it still trails significantly behind the rest of the market.

In fact, it is even behind the regular easy access account offered by NS&I, which pays a rate of 2.85%.

Coles continued: “This isn’t a huge surprise. NS&I doesn’t want to set a blistering pace way out in front of the rest of the pack. It wants to be tucked somewhere in the middle, so it balances the needs of savers and taxpayers. However, at this rate, better accounts are leaving it in the dust.”

Coles did note that there are other appeals to saving with NS&I beyond simply the interest rate, namely the fact that the entirety of your savings pot is protected. This isn’t the case with other banking institutions, where only the first £85,000 held is protected.

If you are looking to get the most out of your savings, check out‘s guide to this week’s top easy access, fixed rate and notice ISAs.

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.

Big flu jab price hikes this winter: Where’s cheapest if you can’t get a free vaccine?

Pharmacies, supermarkets and health retailers are starting to offer flu jabs ahead of the winter season, but t...

Is now the time to fix your energy deal?

Fixed energy tariffs all but disappeared during the energy crisis. But now they are back with an increasing nu...

Octopus steps in to buy Shell Energy – what customers need to know

The deal is expected to complete in the fourth quarter of 2023 and will take Octopus Energy’s retail supply ...

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.

The best student bank accounts in 2023: Cash offers, tastecards and 0% overdrafts

A number of banks are luring in new student customers with cold hard cash this year – while others are compe...

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?

Money Tips of the Week