NS&I to reduce some interest rates to almost nought from 24 November

The changes will apply to NS&I's variable rate products and some fixed term products. The Premium Bonds prize fund rate will also be reduced and apply from the December 2020 draw.

NS&I said the new interest rates will align its savings products against the rates offered by the banks and building societies.

The NS&I's Direct Saver product - a savings account - will be reduced from a current interest rate of 1% down to 0.15%. Elsewhere, income bonds offered by the body will fall from 1.15% offered to just 0.01%.

Meanwhile the interest rate on its one year guaranteed growth bond will fall from 1.10% to 0.10% and interest of the guaranteed income bond will fall from 1.05% to 0.06%.

A full list of product interest changes can be found below.

The number of premium bond prizes will fall from 3,856,020 to 2,850,256 in December 2020.

NS&I chief executive Ian Ackerley said reducing interest rates was always a tough decision: "In April we cancelled interest rate reductions announced in February and scheduled for 1 May. 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," he said.

"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."

Positive Wealth Creation Chartered financial planner Alex Turco tweeted and that changes from NS&I were an "absolute insult".

What an absolute insult from @nsandi reducing income bonds interest rates to 0.01% from 23 November.

— Alex Turco (@alexjturco) September 21, 2020

Variable rate savings products changes:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed term savings products changes:

 

 

 

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