
NS&I announced reductions to the interest rates on a whole number of its savings products last month, with these being due to come into effect in November 2020. It comes following months of the government-backed savings provider featuring high on the best buy tables for various savings products, including easy access savings options.
“In April we cancelled interest rate reductions announced in February and scheduled for May 1.
“Given successive reductions in the Bank of England base rate in March, and subsequent reductions in interest rates by other providers, several of our products have become ‘best buy’ and we have experienced extremely high demand as a consequence.
“It is important that we strike a balance between the interests of savers, taxpayers and the broader financial services sector; and it is time for NS&I to return to a more normal competitive position for our products.”
The interest rate changes will be effective from November 24, 2020.
DON’T MISS
Premium Bonds
Premium Bonds holders will also be affected, as the prize fund rate will be reduced by 40 basis points, from 1.40 percent to 1.00 percent.
As such, this means the odds of winning per £1 Bond number will change from 24,500 to one, to 34,500 to one.
This particular change will apply from the December 2020 draw.
The Premium Bonds prize fund rate will also be reduced and apply from the December 2020 draw.
To find out details of local deals in your area, please fill in your postcode below.
Fixed term savings products
Next month, on November 24, NS&I is to reduce the rates it offers for fixed term investments with the reductions ranging from 90 to 115 basis points.
Those with current holdings will not see changes until they mature, and customers do not need to take action now, NS&I said.
Guaranteed Growth Bonds (1-year)
Currently: 1.10 percent gross/AER
From November 24, 2020: 0.10 percent gross/AER (-100 basis points)
Guaranteed Growth Bonds (2-year)
Currently: 1.20 percent gross/AER
From November 24, 2020: 0.15 percent gross/AER (-105 basis points)
Guaranteed Growth Bonds (3-year)
Currently: 1.30 percent gross/AER
From November 24, 2020: 0.40 percent gross/AER (-90 basis points)
Guaranteed Growth Bonds (5-year)
Currently: 1.65 percent gross/AER
From November 24, 2020: 0.55 percent gross/AER (-110 basis points)
Guaranteed Income Bonds (1-year)
Currently: 1.05 percent gross / 1.06 percent AER
From November 24, 2020: 0.06 percent gross / 0.06 percent AER (-100 basis points)
Guaranteed Income Bonds (2-year)
Currently: 1.15 percent gross / 1.16 percent AER
From November 24, 2020: 0.11 percent gross / 0.11 percent AER (-115 basis points)
Guaranteed Income Bonds (3-year)
Currently: 1.25 percent gross / 1.26 percent AER
From November 24, 2020: 0.36 percent gross / 0.36 percent AER (-90 basis points)
Guaranteed Income Bonds (5-year)
Currently: 1.60 percent gross / 1.61 percent AER
From November 24, 2020: 0.51 percent gross / 0.51 percent AER (-110 basis points)
Fixed Interest Savings Certificates (2-year)
Currently: 1.15 percent tax-free/AER
From November 24, 2020: 0.10 percent tax-free/AER (-105 basis points)
Fixed Interest Savings Certificates (5-year)
Currently: 1.60 percent tax-free/AER
From November 24, 2020: 0.50 percent tax-free/AER (-110 basis points)
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