More cuts to NS&I savings
Tuesday, 14 Oct 2008 11:27
National Savings and Investments (NS&I) is slashing the interest rate on its saving plans by up to 0.50 per cent per year.
It means the Premium Bond prize fund rate will also be cut from 3.25 per cent to 2.85 per cent per year.
The move comes after the Bank of England cut its base rate from five per cent to 4.5 per cent last week.
NS&I said the Bank's reduction had a bearing on its variable rate products and therefore most of these savings offers would face interest rate cuts.
The revised rates for the variable rate products are set to come into effect from October 22nd. The rate on NS&I's direct ISA was also reduced on October 8th.
The change to Premium Bonds is due to take effect on November 1st and to Income Bonds on November 6th.
NS&I said it would continue to pay out over £1 million in tax-free Premium Bond prizes each month including two £1 million jackpot prizes.
"The odds of winning a prize with each £1 Premium Bond number will change to 24,000 to one – previously 22,000 to one," it said.