NS&I cuts savings rates

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NS&I cuts savings rates

National Savings & Investments (NS&I) is dropping its interest rates on variable rate offers following the Bank of England's reduction of the base rate earlier this month.

Thursday, 19 February 2009 12:00

Interest rates on National Savings & Investment's (NS&I) fixed-rate products are being cut by up to 1.35 per cent.

Most of the organisation's variable rate savings products will also undergo interest rates cut by 0.75 per cent, it was announced today.

According to NS&I it is cutting the fixed-rates because of falls of up to 3.5 per cent in gilt yields since September 2008. Rates on its fixed savings products are based on returns made on gilts, which are government bonds.

And it blamed tumbling Bank of England base rates for the fact it had cut interest on its variable rate products.

NS&I said interest rates already invested in its fixed-rate savings accounts would not be affected by the cuts, which come into effect today.

And it said the Premium Bonds prize fund remained unchanged at 1.8 per cent and would be held until, at least, the March 2009 draw.