NS&I cut ISA saving rates by 1.5%

NS&I cuts ISA rates

National Savings and Investments has lowered the rates on both its cash and direct ISAs in response to the change in the base rate.
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Monday, 10 November 2008 12:00

National Savings & Investments (NS&I) has cut the rate offered to customers saving with its Direct ISA.

Following the Bank of England's decision to cut the base rate by 1.5 per cent, NS&I dramatically reduced the rate on the ISA from 4.8 per cent to 3.3 per cent.

The new rate became effective on Friday, November 7th - just one day after the Bank of England made its cut to interest rates. NS&I said this was to ensure "transparency and consistency".

Despite the less alluring interest, NS&I said the ISA rate was guaranteed to be at least 0.30 per cent above the base rate until April 5th, 2009.

The savings product requires a minimum investment of £1,000 and then a minimum further deposit of £250 or £100 by standing order.

All interest paid on the ISA is tax free.