National Savings and Investments has been forced to drop the interest rate paid on its Children's Bonus Bond product by a tenth because of subdued gilt rates.
As of this month, the new rate is 4% compared with 4.45% paid out since 19 August last year. NS&I further adds its changes have been few and far between compared with private sector financial services firms. It quotes Abbey cutting its rates five times in the past 12 months, with NatWest and Alliance & Leicester cutting their rates in the past three months. IFAonline
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